In a broad sanctions announcement, the US government named and targeted several Indian companies for allegedly purchasing and trading Iranian petrochemical products. The move aims to cut off the Iranian regime's revenue streams that fund terrorism and domestic repression, according to a statement released by the US Department of State. The sanction comes after US President Donald Trump imposed a 25% tariff on India, along with a penalty.

Key Highlights

• President Trump to impose 25% tariffs on Indian imports from August 1, citing trade imbalance concerns.
• U.S. sanctions six Indian firms for facilitating trade in Iranian petroleum and petrochemicals, freezing U.S. assets. 

The US Department of State, in collaboration with the Treasury's Office of Foreign Assets Control (OFAC), identified several Indian firms among the 20 entities and ten vessels designated globally. According to US authorities, these Indian companies knowingly engaged in significant transactions involving Iranian-origin petrochemicals from January 2024 to early 2025.

Indian Companies Sanctioned

The following Indian companies have been designated as violating US sanctions against Iran: Kanchan Polymers, Alchemical Solutions Pvt. Ltd., Ramniklal S Gosalia and Company, Jupiter Dye Chem, Global Industrial Chemicals Ltd., and Persistent Petrochem Pvt. Ltd.

What Sanctions Mean

Under US law, the sanctions freeze any assets that these Indian companies may have under US jurisdiction and prohibit American entities or individuals from doing business with them. Any US-related financial or trade activity involving these firms, even indirectly, now faces secondary sanctions.

These prohibitions apply to:

• Banking and payment systems
• Shipping and logistics linked to US supply chains.
• Dollar-denominated transactions between sanctioned entities
• Contributions of money, goods, or services to or from these businesses

The US government has emphasized that the sanctions are not intended to be punitive, but rather to effect a change in behavior, urging companies to stop doing business with Iran's sanctioned sectors.

Also Read: Trump Suggests 20-25% tariffs on Indian Imports

India's response?

The Indian government has not yet responded to the US announcement with an official statement. Experts predict that New Delhi will, however, employ backchannel diplomacy to elucidate its stance, particularly if the sanctions represent a collateral risk to the larger strategic alliance between the US and India. Notably, India and Iran have had close energy and commercial ties for a long time, but these have waned recently as a result of pressure from the US.

Industry associations are anticipated to demand clarification on the duration of the designations and the possibility of negotiated delisting, which  the US government  has indicated is feasible in the event of "a positive change in behavior."