Global markets turned cautious after fresh concerns emerged over a possible escalation in US trade action linked to Iran. Investor sentiment has been dented by speculation that the US could tighten penalties on countries that continue commercial engagement with Iran.

At the centre of the concern is a proposed25 percent US tariffon nations maintaining trade ties with Iran. While a 25 percent levy may appear manageable in isolation, market participants fear it could be imposedin addition to existing duties, potentially pushing the total tariff burden to as high as75 percent.

“The tariff impact and the US administration’s move to raise tariffs on countries dealing with Iranian exports and imports is creating pressure on markets,” saidBathini.

He pointed out that India has historically maintained strong bilateral trade ties with Iran, particularly in the energy sector. “India imports oil from Iran, and in the past, some payments have also been settled in rupee terms,” he said, explaining why India frequently comes under scrutiny whenever Iran-related sanctions tighten.

Bathini believes that while the announcement could trigger short-term volatility, the longer-term impact may be less severe.

“With the current US administration imposing sanctions on Iran and proposing around 25 percent tariffs on countries dealing with Iran, there will be a knee-jerk reaction in trade and markets,” he said. However, he added that broader global conditions could cushion the impact. “Given the current glut in global oil supply and increased availability of Venezuelan oil, the long-term impact could remain largely neutral.”

He noted that greater clarity is likely to emerge over the next couple of weeks as more details become available.

50% or 75% Tariff?

Explaining why tariff estimates being discussed are so high,Akshat Garg, Head of Research and Product at Choice Wealth, said the proposed tariff isnot a standalone measure.

“The proposed 25 percent tariff is a secondary trade measure aimed at pressuring countries that continue commercial engagement with Iran,” Garg said.

He explained that the levy would be separate from existing duties and could belayered on top of them. “If implemented as an additional charge, it could be stacked over prevailing tariffs,” he said.

“For countries already facing duties of around 50 percent, this could sharply raise the effective cost of trade, potentially pushing total tariffs to very elevated levels,” Garg added.

According to Garg, the objective of such measures is strategic rather than purely economic. “The intent is to raise the cost of non-compliance with US foreign policy,” he said, warning that such actions can disrupt global supply chains, increase import costs, and intensify geopolitical tensions.

Bathini added that tariff-related headlines are contributing more to uncertainty than to a clear market trend.

“Markets are currently in a consolidation phase, and we are also in the middle of the earnings season,” he said. “Corporate earnings will guide stock prices, while the upcoming budget will also play a key role in setting direction.”

Overall, he said, Indian markets remain in a‘buy-on-dips and sell-on-rallies’phase.

Experts note that much will depend on how the US ultimately implements the tariff, whether exemptions are granted, and how India navigates ongoing trade negotiations with Washington.

For now, talk of50 percent or 75 percent tariffshas added uncertainty rather than certainty. Investors are advised to monitor policy clarity, earnings trends, and budget signals before drawing conclusions about the long-term impact.

In the near term, tariff headlines may continue to drive volatility, but fundamentals are expected to regain importance once uncertainty subsides.