The Trump administration is ramping up economic sanctions on Iran through "Operation Economic Outcast," while also threatening dire secondary sanctions against countries that continue Iran-related business. The new policy puts countries like India and other close U.S. partners in an awkward situation. New Delhi remains a critical U.S. partner in the Indo-Pacific, but it also has commercial, energy and strategic interests in Iran that it won't likely discard, potentially putting it at odds with the Trump administration.
TRUMP THREATENS 'UNPRECEDENTED' ECONOMIC CONSEQUENCES FOR ANY NATION AIDING IRAN On Monday, exactly a week after the Trump administration launched its new sanctions campaign, Indian Prime Minister Narendra Modi met with Iranian President Masoud Pezeshkian on the sidelines of the Shanghai Cooperation Organization summit in Kyrgyzstan. It was their first meeting since the war broke out six months ago. According to an Iranian readout, Pezeshkian asked Modi "to use India’s extensive contacts" to help steer the involved parties away from war and back toward dialogue, while thanking Modi for standing by Tehran.
Modi reiterated that New Delhi wants to strengthen its "long-standing friendship" with Tehran and "expand and diversify" the two countries’ trade basket. "That was for Modi to signal to a domestic audience that he is not kowtowing to Trump," Council on Foreign Relations Senior Fellow Sadanand Dhume told Fox News Digital. "India-Iran relations have already been largely hollowed out by previous rounds of sanctions, so there is no question of India trying to balance between the U.S. and Iran," he added.
Secretary of State Marco Rubio was asked by Fox News' Brian Kilmeade on "The Brian Kilmeade Show" Tuesday about Modi's meeting with the Iranian president. Rubio said he didn't think there was a trade deal between India and Iran — noting many countries around the world talk to Tehran — and stated, "What ultimately happens, though, is – and the President’s been very clear – is no country should be helping Iran evade sanctions. No country should be out there helping them create mechanisms by which they can generate revenue that they will then use to sponsor terrorism and try to build a nuclear weapon.
And if countries decide to do that, then we’re going to have to sanction them too." A U.S. official echoed Rubio's comments and told Fox News Digital that, "the Administration continues to have positive discussions with our economic partners to ensure Iran never possesses a nuclear weapon." India has been among Iran’s top five trading partners in recent years, though bilateral trade has dropped dramatically since its 2018-19 peak. IRAN LOSES KEY ECONOMIC LIFELINE IN MIDDLE EAST THAT TRUMP'S SANCTIONS COULDN'T REACH AS DEADLOCK PERSISTS New Delhi’s exports to Iran are concentrated on goods that can carry humanitarian exemptions, including pharmaceuticals. Iran is also the second-largest overseas market for Indian rice, with India exporting more than $383 million worth in the first six months of the year.
Conversely, India resumed importing Iranian crude oil for the first time in seven years in April, after the Trump administration temporarily lifted sanctions to soften the Middle East conflict’s impact on global energy. Iranian oil shipments to India were valued at roughly $707 million in the first half of the year. India has already come into the Treasury Department's crosshairs, with the U.S. sanctioning four India-based companies and three Indian nationals over alleged links to Iranian petroleum and petrochemical trade.
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