U.S. Sanctions on Four Indian Companies: What's Next? Japanese Companies Should Also Be Wary of the Power of "Secondary Sanctions"

Four Indian Companies Targeted by U.S. Sanctions

U.S. Policy on Iran Enters a New Phase

On August 24, 2026, the U.S. government launched "Operation Economic Outcast," significantly intensifying economic pressure on Iran. Among the entities targeted by the sanctions, revealed over the following day, were four India-based companies and three Indian nationals.

The companies affected are Portease Partners LLP, Sadashiva Overseas Limited, PP Softtech Private Limited, and Prakrutees Infra Impex India Private Limited.

According to the U.S. Department of State, Portease Partners is alleged to have brokered several transactions importing Iranian petrochemical products into India. The company's partners, Indrismiya Asharafmiya Shekh and Harish Ramchandra Rangi, were also targeted.

Regarding Sadashiva Overseas, the U.S. side explained that it imported approximately $69 million worth of oil products originating from Iran between February 2024 and June 2025.

PP Softtech is said to have imported approximately $25 million worth between January 2024 and June 2025, while Prakrutees Infra imported around $25 million worth from May 2023 to February 2026. PP Softtech's director, Prashant Garg, was also sanctioned.

The transaction amounts indicated by the U.S. for the three companies alone total approximately $119 million.

However, it is important to note the following.

This is a designation by the U.S. government, and the U.S. determination of "willful involvement in significant transactions" is not synonymous with a criminal act being confirmed by Indian courts or other domestic authorities.

As of August 26, detailed official rebuttals from the targeted companies have not been widely confirmed in major reports. Therefore, it is necessary to distinguish that the transaction content is "as determined by the U.S. government."

What is "Operation Economic Outcast"?

The important point about the sanctions on Indian companies is that they are not individual measures targeting only the four companies.

The U.S. Treasury Department describes Operation Economic Outcast as an ongoing campaign to globally cut off the "economic lifelines" supporting the Iranian government and the Islamic Revolutionary Guard Corps.

In the first wave on August 24, approximately 60 entities, including companies, individuals, and vessels, were sanctioned.

Furthermore, the U.S. has expanded the scope to potentially sanction third-country companies and individuals in five areas: digital assets, technology, gold, aviation, and shipping, in addition to the traditionally important oil and financial sectors.

The U.S. Treasury Department has indicated deadlines for countries to cease Iran-related activities that the U.S. finds problematic, warning of additional measures if not complied with. Companies that assist in Iran's money laundering or sanctions evasion may also be cut off from the U.S. financial system.

In other words, what the U.S. is presenting to global companies is, in extreme terms,

"Will you continue trading with Iran, or will you protect your access to the U.S. financial system?"

This is the choice.

This is the fear of "secondary sanctions."

Why U.S. Sanctions Affect Foreign Companies

Typically, a country's laws are thought to apply only within that country.

However, U.S. economic sanctions are different.

In international trade, dollar settlements are widely used. Many global banks, insurance companies, shipping companies, and trading firms are deeply connected to the U.S. market.

Therefore, if the U.S. government warns, "Continue trading with Iran and face restricted access to the U.S. financial system," even non-U.S. companies could suffer significant impacts.

If banks refuse settlements, goods cannot be purchased.

If insurance companies do not underwrite marine insurance, it becomes difficult to operate tankers.

If logistics companies refuse transactions, it becomes challenging to move cargo from ports.

"Over-compliance" can occur, where not only the sanctioned companies themselves but also surrounding companies that trade with them begin to distance themselves.

This is where the true influence of U.S. secondary sanctions lies.

India-Iran Trade Has Already Shrunk by Over 90%

For India, Iran has historically and economically been an important country.

However, as a result of strengthened U.S. sanctions on Iran, the scale of trade between the two countries has significantly shrunk.

According to Reuters, the trade volume between India and Iran, which was about $17 billion in the 2018-19 fiscal year, decreased to approximately $1.6 billion in the 2025-26 fiscal year. This is a reduction of over 90%.

Currently, India's main exports to Iran are rice, tea, and pharmaceuticals.

In the first half of 2026 alone, India's rice exports to Iran reached about $383 million, and tea exports about $14 million.

On the other hand, Iran's exports to India, backed by temporary U.S. sanctions exemptions, saw crude oil imports reach approximately $707 million in the first half of 2026.

Thus, it is not just an issue for the four sanctioned companies.

Many companies, including banks, ports, shipping companies, insurance companies, and food exporters, need to confirm whether there are any Iran-related companies in their chain of transactions.

On Social Media: "Do Sanctions Really Benefit the U.S.?"

Following the announcement of Operation Economic Outcast, discussions spread on social media and forums.

Of course, posts on social media are not public opinion polls and do not represent the views of the entire population. With that premise, it is interesting to note that there are quite a few voices concerned about the long-term side effects of U.S. financial sanctions, rather than whether to support Iran or not.

In a financial community on Reddit, opinions were posted suggesting that if the U.S. excludes countries from the dollar settlement sphere, it might motivate sanctioned countries to develop non-dollar settlement methods, potentially weakening the dollar's status as the world's primary currency in the long run.

There were also skeptical reactions like "Is the U.S. more harmed than Iran?" and discussions about whether repeated sanctions would lead to the development of alternative settlement networks by countries like China.

In another thread, there were reactions questioning why the U.S., while using strong language, avoids direct sanctions against major Chinese financial institutions, which are the largest buyers of Iranian crude oil.

The concern is whether sanctioning small companies while avoiding full financial confrontation with China truly has any effectiveness.

On the other hand, those who support the sanctions see them as a way to target Iran's nuclear and missile development, cyberattacks, and oil revenues simultaneously, applying pressure without escalating military conflict.

Thus, the debate on social media is not just about "whether to pressure Iran,"

but also about "whether weaponizing the global dollar financial system as a method is in the long-term interest of the U.S. itself."

The discussion has expanded to this point.

Yet the Biggest Focus is China

And when considering this question, China cannot be overlooked.

The U.S. has strongly indicated the possibility of imposing secondary sanctions on companies worldwide that trade with Iran.

However, according to reports from Reuters and others, the largest sanctions against major Chinese financial institutions were avoided at the initial stage following the announcement.

China is one of the largest buyers of Iranian crude oil.

If the U.S. truly aims to bring Iran's oil revenue close to zero, it may ultimately be unavoidable to confront Chinese companies and financial institutions.

However, excluding China's giant banks from the dollar system would not only affect Iran but also shock the global financial market.

This is why the U.S., while advocating "maximum pressure," must be cautious in actual implementation.

This contradiction may be the key point that determines the success or failure of Operation Economic Outcast.

It's Not Just News from a Distant Country for Japan

So why should Japan be concerned about sanctions on Indian companies?

The main reason is crude oil.

According to the Agency for Natural Resources and Energy, Japan's dependency on foreign oil supply is extremely high, with a Middle East dependency rate of about 95.1% for crude oil imports in the 2024 fiscal year.

Japan is overwhelmingly dependent on Middle Eastern countries around the Strait of Hormuz, such as Saudi Arabia, UAE, Kuwait, and Qatar.

This is not just a statistic.

In March 2026, Japan actually faced a situation where oil tankers could not effectively pass through the Strait of Hormuz.

On March 24, the Ministry of Economy, Trade and Industry decided to release approximately 8.5 million kiloliters, about one month's worth, of national reserve oil to protect domestic oil supply.

Furthermore, in April, a second release of about 20 days' worth of reserves was also carried out.

For Japan, the Iran issue is not just diplomatic news from the distant Middle East.

It is a domestic economic issue that affects gasoline prices, electricity rates, logistics costs, airfares, manufacturing costs, and corporate profits.

Japan Recently Considered "Resuming Iranian Oil Imports"

There is another noteworthy fact.

Just over a month before the announcement of Operation Economic Outcast, resuming imports of Iranian oil was becoming a realistic theme in Japan.

Reuters reported in July that Iran had approached Japanese companies to resume oil sales, following a temporary sanctions waiver set by the U.S. from June 22 to August 21 in line with U.S.-Iran negotiations.

If realized, it could have been the first purchase of Iranian oil by Japan since 2019.

However, Japanese buyers reportedly sought longer sanctions waivers and assurances of navigation safety, as short-term waivers made long-term contracts and tanker arrangements difficult.

The waiver expired on August 21.

The announcement of Operation Economic Outcast was on August 24.

Just three days later.

This time gap symbolizes the risks inherent in business under sanctions.

A transaction that is legally concluded today may face a completely different environment just a few days later.

For companies conducting energy transactions worth tens or hundreds of millions of dollars, this is something that cannot be ignored.

A Difficult Balance for Japanese Diplomacy

Japan has another unique circumstance.

While being an important ally of the U.S., Japan has also maintained its own diplomatic channels with Iran for many years.

On August 12, 2026, Prime Minister Sanae Takaichi held a telephone conversation with Iranian President Pezeshkian.

Japan conveyed the necessity of easing military tensions and calming the situation early, while reiterating the importance of "free and safe navigation without additional costs" in the Strait of Hormuz.

This expression well represents Japan's position.

Japan cannot ignore U.S. policy toward Iran.

However, completely severing diplomatic relations with Iran may not be advisable for Japan's energy security.

To ensure the safety of the Strait of Hormuz, communication with Iran itself is also necessary.

The Biggest Risk for Japanese Companies: "Ignorance is No Excuse"

The sanctions on the four Indian companies serve as an important warning to Japanese companies.

Particular caution is needed not only for direct transactions with Iranian companies.

Raw materials procured by trading companies.

Overseas logistics companies.

The actual owners of ships.

Banks that mediate settlements.

Ports where cargo was transshipped.

The final country of origin.

If a sanctioned company exists anywhere in such a supply chain, the entire transaction could become problematic.

The U.S. Treasury Department clearly indicates that there is a risk for foreign companies or individuals if they support sanction evasion.

In the future, what will be required of the economic security departments of Japanese companies is not simple "client checks."

It will be sanction risk management that includes the clients' clients, ships, insurance, financial institutions, and country of origin.

The Era of "Just Buy Cheap Oil" is Over