India and Iran: Tied in tandem

India and Iran are civilisational states with a historic connection whose roots and reflections are distinctly witnessed even today. Civilisational states, by virtue of their conserved knowledge and strength, are usually robust and resilient in their responses to challenges from expected or unexpected quarters. India and Iran have also weathered many such storms in their long journey. Iran became the major bone of contention, especially after the 1979 Islamic revolution and the effort by the new Ayatollah regime to create a Shia crescent in a largely Sunni- dominated Arab world and beyond, and new fault lines were created in West Asia.

Geo-regions contestation ensued between Saudi Arabia and the Islamic Republic. The new regime’s disdain for the Satanic United States and artificial existence and legitimacy of the little Satan in Israel, as well as perceived capitulation by the oil-rich Gulf monarchies to the Western masters, created the new roadblocks in the creation of regional consensus and security architecture, to this day. An Iraq-Iran war was engineered by the Americans, which lasted through the 1980s. Then, Iraq invaded Kuwait, again with the connivance of the U.S. Eventually, former President of Iraq Saddam Hussein was also deposed and killed in 2003 by the U.S. and NATO military invasion on the basis of manufactured evidence of Saddam possessing weapons of mass destruction. This folly had an undesirable outcome, too, which placed Iraq under the Shia influence of Iran expanding its outreach.

This article is from The Hindu e-book. Iran: Revolution in retreat

These also brought about exceptional instability and the onset of terrorism in the region and beyond. All these have been causes of deep concern for India.

Pursuant to the geopolitical divide in the region, Tehran embarked on its ambitious nuclear programme, which was an anathema for Israel and the West as well as Gulf powers like Saudi Arabia — which is the custodian of two holy mosques in Makkah and Medina and hence, a de facto leader of the Islamic world. Iran’s nuclear bomb was perceived as a direct threat to their own suzerainty, superiority and security, given the hot and cold relationship in various periods of history. It is ironic that during Cold War 1.0, all three of them, viz. Iran, Israel and Saudi Arabia, were part of the U.S.-led bloc.

Moreover, Iran has signed up to the Nuclear Non-Proliferation Treaty (NPT) and its enrichment capabilities, combined with its suspicious connection with Pakistani nuclear scientist A.Q. Khan, deepened the suspicion. Hence, covert CIA-Mossad operations against Iranian nuclear scientists and nuclear plants and establishments were carried out to decimate and delay the Iranian quest for a nuclear weapon. This, of course, was denied by the Iranian regime, claiming that they wished to pursue a civil nuclear programme for energy uses only. When the trust deficit is deep, nothing sounds reasonable or rational, irrespective of the intent.

Although the U.S. had emerged as a major security umbrella for many of the regional powers, especially in the Gulf, their main premise continues to be the security and safety of Israel against any threat, especially the one coming from Tehran and its Islamic regime that has become an ‘Axis of Evil’ and encompassed the 4Hs of Houthis (Yemen), Hamas (Gaza), Kataib Hezbollah (Iraq) and Hezbollah (Syria and Lebanon) — cutting across the Shia-Sunni divide and working as Iran’s ‘Forward Defence’. It provided an asymmetric strategic advantage to Iran against Israel and the Gulf majors.

It is only during the last two years of Israel-Hamas’s fifth war of attrition that Prime Minister Benjamin Netanyahu-led ultra-nationalist government decided to fight on six fronts and successfully decimated the powerful Hezbollah and Hamas, and managed to take on Houthis through its carpet bombing and highly impressive and successful decapitation of leadership strategy. Iran and Israel have also directly engaged in war twice during this period, as the Trump administration chose to bomb some of the Iranian nuclear sites in June 2025.

There were indications that Tel Aviv could have taken out the Iranian Supreme Leader, but for the U.S. rejection of this risky strategy and an uncertain outcome. Removal of Bashar al-Assad (from the post of President) in Syria further weakened Iran’s direct land connect with Hezbollah, which was the most powerful of the 4Hs, and influence in the region, especially in Syria and Lebanon. Moreover, the U.S. co-opted and supports the newly whitewashed leader, President Ahmed al-Sharaa, being a former designated terrorist with $10 million bounty. He has been hosted with alacrity by Western capitals, including at the White House in November 2025, with sanctions under Caesar’s Act being lifted. Russia also hosted him to salvage their strategic ports and advantage in Syria and the region.

Iran’s nuclear programme or quest for a nuclear “Islamic” bomb, even though banned by the Supreme Leader through a fatwa, is feared across the West Asian region and beyond. Iran has signed up to the NPT, and hence, any enrichment beyond the permissible limit of civil nuclear uses is violative of the treaty. In order to contain the prospect, P5 (U.S., U.K., France, Russia, China) and the European Union (EU) had worked out the Joint Comprehensive Plan of Action ( JCPOA) in return for easing of crippling, prolonged economic and other sanctions. India maintained that since Iran is a signatory of the NPT, it should comply with the diktat and provisions of the Treaty, but it must also have the right to a peaceful civilian nuclear programme for energy requirements, which Westerners and Israel do not agree with, despite International Atomic Energy Agency (IAEA) monitoring. In 2018, Trump 1.0 scrapped the deal on May 8 and threatened other countries with secondary sanctions if they continued to deal with Iran after the unilateral cut-off date of November 4.

Lifting of sanctions pursuant to the JCPOA was a welcome development, for it removed a major irritant and obstacle for New Delhi, since Iran remained a major energy security partner supplying nearly 12% of its requirement. India maintains — and had reiterated during former President Hassan Rouhani’s visit — that “the Indian side reaffirmed its support for full and effective implementation of the Joint Comprehensive Plan of Action ( JCPOA), which has been endorsed by the UN Security Council and is crucial contribution to the non-proliferation framework and international peace, stability and security”.

Neither the Saudis, Emiratis, nor the Israelis were happy with this approach of the Obama administration since it was merely granting time and money before the Islamic regime acquires the nuclear bomb. However, the IAEA and the Europeans and even the Americans appeared to be content with the progress and verification of compliance by Iran.

President Trump, in keeping with his conviction and Israeli influence and poll promises, walked away from the deal in 2018 and went on to bomb Iran in his second term as they played the game of direct and indirect negotiations with one another, creating greater instability in the region.

The Trump administration cited Iran’s regional “malign activities” and repeated ballistic missile tests to assert that “Iran’s provocative actions threaten the United States, [and] the [Middle East] region”, and that the JCPOA had failed to address Iran’s objectionable behaviour beyond its nuclear programme.

It was partly on these grounds that President Trump withdrew the U.S. from the JCPOA on May 8, 2018, and announced that all U.S. sanctions would be reimposed. Tehran doubled its efforts to develop technologies and capability to enrich the uranium to near weapons-grade. It is said to hold 400 tonnes of enriched uranium, which was supposed to be the target of U.S. and Israeli strikes in June 2025. The 12 days of war between Iran and Israel nearly brought the region to a dangerous escalation. It has been further followed by the snapback sanctions by the EU, taking away the United Nations (UN) rider on the sanctions. Iran, Russia and China rejected as they continued to maintain that it was not Iran that had walked out of the JCPOA, and hence, was unfairly targeted. India’s reticence was evident even through BRICS and SCO (Shanghai Cooperation Organisation) declarations decried this unilateralism.

Iran’s national security policy is the product of many overlapping and sometimes competing factors such as the ideology of Iran’s Islamic revolution, perception of threats to the regime and the country, long- standing Iranian national interests, and the interaction of the Iranian regime’s factions and constituencies. Iran’s leadership:

• Seeks to deter or thwart U.S. or other efforts to invade or intimidate Iran or to bring about a change of regime. It also wants the U.S. out of the region.

• Has sought to take advantage of opportunities of regional conflicts to overturn a power structure in the Middle East that Iran’s leaders assert favours the United States, Israel, Saudi Arabia, and other Sunni Muslim Arab regimes.

• Seeks to enhance its international prestige and restore a sense of “greatness” reminiscent of ancient Persian empires.

• Characterises its support for Shia and other Islamist movements as helping the region’s “oppressed” and asserts that Saudi Arabia, in particular, is instigating sectarian tensions and trying to exclude Iran from regional affairs.

• Has sought to use the sanctions relief provided by the July 2015 multilateral nuclear agreement ( Joint Comprehensive Plan of Action, JCPOA) to emerge as a regional energy and trade hub and to negotiate future weapons buys. U.S. officials assert that the easing of sanctions has provided Iran with additional financial resources to further its regional interventions.

• Sometimes disagrees on tactics and strategies. Supreme Leader Ali Khamenei and key hardline institutions, such as the Islamic Revolutionary Guard Corps (IRGC), oppose any compromises of Iran’s national security core goals, but support the reintegration into regional and international diplomacy that was advocated by former President Rouhani during his tenure.

With the demise of the Soviet Union and the emergence of the U.S. as a superpower, friends of Iran came into the orbit of the sanctions regime of the West. Iran’s regional engagement and ambitions have been under scrutiny, especially when seen through the lens of the Shia-Sunni crescent. Given its influence in Iraq, Afghanistan, Syria and Lebanon to Yemen and beyond in Central Asia, the Israelis are amongst those who are most concerned. Iran has often been accused of supporting terrorism. Hezbollah (The Army of God) and Iran’s army (IRGC) have secured for the country substantial areas of influence.

India’s Iranian dilemma

India and Iran relations, despite historicity and civilisational connect, have remained below potential due to sustained U.S. and Western pressure. As early as 1950, both countries signed a Friendship Treaty. However, the relationship has experienced hard times, especially since the late 1970s, when the Shah of Iran was toppled in the Islamic revolution, and Americans were taken hostage. The bilateral relationship was tested often, but Iran played its cards pretty strong, given the Soviet/Russian support and its occasional engagement with the European countries.

The relationship in modern times reached its peak over two decades ago, during 2001-03, when the Tehran and Delhi Declarations were signed, establishing credible frameworks for enhanced cooperation. The second round happened after the onset of Prime Minister Narendra Modi, whose visit to Tehran on May 22-23, 2016, was highly significant as it re-emphasised dialogue, regional stability and deeper economic, energy and connectivity ties. A joint statement titled “Civilizational Connect, Contemporary Context” was issued, and the Trilateral Agreement on Trade, Transport and Transit between India, Iran and Afghanistan was signed.

The key agreement was the 10-year contract for management, development and operationalisation of the Chabahar port and International North South Transport Corridor (INSTC). Strategically positioned at the crossroads of South Asia, Central Asia, and the Middle East, the Chabahar Port presents an opportunity to be a transit port for trade between India and Central Asian countries and Afghanistan. A visit by Mr. Rouhani in 2018, during his Presidency, further cemented the ties and the framework of cooperation between the two countries. However, regional and superpower geopolitics have created many a roadblock for the relationship and critical projects.

To deepen cultural ties, India has also included Farsi (Persian) as one of the nine classical languages under the National Education Policy. In 1994, Iran helped block a resolution critical of India at the United Nations Commission on Human Rights (UNCHR) on the Kashmir issue. The resolution was being pushed by the Organisation of Islamic Countries (OIC), supported by influential Western nations. If passed, the resolution would have gone to the UN Security Council to initiate economic sanctions against India . India reciprocated in 2023 on a UN Resolution on the human rights situation in Iran; it also abstained on the demand to set up a fact- finding mission after the death of Mahsa Amini.

Connectivity

Chabahar port has mostly remained in the news since the inception of this strategic connectivity project between India and Iran over two decades ago. Due to the unending saga of cross-border terrorism by Pakistan against India, the ensuing uncertainty and need to connect with Afghanistan and Central Asia, its two vital partners, New Delhi embarked on developing this deep-sea port that would be mutually beneficial. Eventually, this was to feed into the over two-decades-old connectivity corridor (INSTC) with Russia and Europe, among thirteen other countries in the region and beyond.

Iran and the U.S.’s hate-and-hate tango has often caused problems, especially in the smooth progress of the project, due to the fear of CAATSA and other secondary sanctions feared by many Indian firms that had a larger exposure to the West. Yet, substantial progress has been achieved, and ironically, the Russia-Ukraine war has refocused attention and accelerated the usage and further implementation of the Chabahar project while integrating it with the INSTC.

Both New Delhi and Tehran have shown requisite commitment to advancing the Chabahar project since 2003, which eventually picked up pace in 2012. But during the important and successful visit of India’s Foreign Minister S. Jaishankar to Tehran, in the backdrop of the Houthi challenge in the Red Sea, he met Iranian Minister of Roads and Port Development Mehrdad Bazrpash and discussed long-term cooperation, development and management of Chabahar port and other connectivity projects, including the smooth functionality of the 7,200-km-long multimodal INSTC. This arrangement was to be for a 10-year period and would replace the management of Shahed Beheshti terminal, which was undertaken on a yearly basis by the India Ports Global Limited (IPGL).

During his call on the late President Ebrahim Raisi, the security of the shipping lanes as well as the speedier implementation of the Chabahar Port development plans were underscored.

Following these meetings and an earlier visit by the Indian Minister of Ports and Shipping, and in less than six months of framework agreement discussions that Mr. Jaishankar had, on May 13, 2024, the contract was signed by IPGL and Iran’s Port & Maritime Organisation, in the presence of Ports, Shipping and Waterways Minister Sarbananda Sonowal. “The long- term bilateral contract on Chabahar Port Operation was signed between Indian Ports Global Limited (IPGL) of India and the Port & Maritime Organisation (PMO) of Iran, enabling operation of Shahid-Beheshti in Chabahar Port Development Project for a period of 10 years”, and this lease agreement further strengthens the bilateral ties between the two countries while bolstering confidence and boosting trust of trading communities from the region. Accordingly, IPGL will inject approximately $120 million into the port’s development, alongside an additional $250 million in financing, making the contract’s total value reach $370 million. In its budgetary provisions for 2024-25, the Ministry of External Affairs had allocated ₹100 crore as well.

For India, the first-ever contract for managing a foreign port is a significant development, even though several Indian companies have been engaged in developing ports in Oman, Myanmar and Israel and elsewhere. Chabahar’s strategic location and proximity obviate the distrusted and disrupted connectivity through Pakistan — be it Karachi or Gwadar. It helps in providing assistance directly to landlocked Afghanistan. India supplied 50,000 tonnes of wheat to Afghanistan via Chabahar port, when Islamabad started playing truant even for the passage of humanitarian assistance to the struggling population. Even Iran has received some assistance.

It also provides another outlet for the energy-rich region by obviating exposure to other Gulf chokepoints like the Strait of Hormuz and Red Sea, especially with regard to energy supplies. Likewise, it helps in rendering project and infrastructural development, both in Afghanistan and Central Asia.

No doubt this news of long-term arrangement has been seen by the U.S. in the light of its degrading relationship with Iran, which, apart from Russia, remains one of the most sanctioned countries. Hence, the threat of secondary sanctions remains real even as Chabahar itself has mostly remained out of the purview of U.S. sanctions for providing relief supplies to a beleaguered Afghanistan. But anything ensuring a long-term relationship with their rivals does not meet with a simple U.S. displeasure, it has to be accompanied by threats. This time was also no exception.

PRIORITY: A view of the Shahid Beheshti Terminal in Chabahar port, Iran, with cargo ships. The port, presenting an opportunity to be a transit point for trade between India and Central Asia, is a key link in India-Iran ties.
| Photo Credit:
Getty Images

The U.S. Deputy Spokesperson implied threats for the Indian companies, while underlining, “We are aware of these reports that Iran and India have signed a deal concerning the Chabahar Port. I would let the Government of India speak to its own foreign policy goals, vis-a-vis the Chabahar Port as well as its own bilateral relationship with Iran.” To which Mr. Jaishankar reminded them that the U.S. should not take a narrow view of it and “if you look at the U.S.’s own attitude towards the port in Chabahar in the past, the U.S. has been appreciative of the fact that Chabahar has a larger relevance and we will work at it. Despite the rhetoric. Hopefully the Americans, in keeping with the Global Comprehensive Strategic Partnership with India, will appreciate the intent and outcome for a larger cause in which they are invested as well especially in Central Asia and hopefully in the welfare of Afghan people who deserve a better deal after what they have gone though in the last two decades and even more as result of U.S.A.’s Taliban to Taliban dance”. Eventually, after the visits of Trump confidante, U.S. Ambassador- designate Sergio Gor, and the U.S. Assistant Secretary Paul Kapur, the U.S. administration has agreed to provide another six-month waiver — till April 2026 — to India from the Iran Freedom and Counter Proliferation Act, for Chabahar. This is a key and perhaps the final extension, unless the U.S. and Iran start renegotiating, for India to work out future modalities that might generate confidence among the Iranians as well.

Phase 1 of the Chabahar port was successfully inaugurated in December 2017. The ratification of the Trilateral Agreement, signed during Prime Minister Modi’s visit, between India, Iran and Afghanistan, was ratified and ready to go for the establishment of an international transport and transit corridor to Afghanistan and Central Asia. India was able to send a wheat shipment of 50,000 tonne to Afghanistan. Both sides also agreed and welcomed the proposed Indian investments in fertilizers, petrochemicals and metallurgy in Chabahar Free Trade Zone.

Ironically, both of India’s major connectivity initiatives are being held up due to the U.S. role, one way or the other. On the one hand, the INSTC is restricted due to the heaviest of sanctions by the U.S. on Iran and Russia, in turn impacting its strategic partner India and some Central Asian countries where it wants to get embedded. On the other hand, the IMEEC (India-Middle East-Europe Economic Corridor) connectivity project, in which the U.S. is a key player, and its ambivalent role in the West Asian crisis, has also extended the difficulty levels for its implementation, again impacting India’s connectivity ambitions. A moot, yet searching question is: “What kind of a global comprehensive strategic partnership it is…” Let us hope they will make a realistic assessment of the ground situation and make appropriate choices, while India is going ahead. In any case, we need to find out ways to deal with such eventualities, either through SPVs (Special Purpose Vehicles) or any other combination that could be sanction immune.

Energy security under attack

Unlike the previous chain of sanctions, this time, the Europeans, Chinese and Russians are clearly against the unilateral U.S. approach of imposing sanctions against Iran, which will directly impinge on their strategic and national interests. India is no exception. Last time, India — like China, Japan and South Korea — got a waiver from the U.S. as these countries demonstrated a reduction in imports of oil from Iran over a certain period of time. This time around, given Mr. Trump’s abrasive, disruptionist and maximalist approach, the situation is a little more complex.

India has maintained that it only recognises UN sanctions and not unilateral U.S. sanctions. Nikki Haley, former U.S. Ambassador to the UN, was in India to convey a forthright message from President Trump in this regard. U.S. Secretary of State Marco Rubio and U.S. Secretary of Commerce Howard Lutnick, and Mr. Trump himself have done the same. Despite the sabre-rattling, hard choices had to be made by the Indian foreign policy establishment, keeping the larger picture and broader interests in mind. Eventually, India was compelled to look for alternative sources, even if it officially did not legitimise the U.S. decision. Indian oil majors and refiners, both in the public and private sectors, are unable to expose themselves to the U.S. sanctions due to their global operations.

We were not alone in this and if a decision was made to stop purchasing Iranian oil, the U.S. administration was expected to provide alternative sources of energy from Saudi Arabia, the United Arab Emirates (UAE) and the U.S. itself. Saudi Arabia was asked to ramp up oil production by up to 2 mbpd, while the U.S. is still trying to find alternatives and remains adamant now that Russia and Venezuela have been added to this list. Meanwhile, the U.S., Saudi Arabia and UAE had offered to bridge the oil deficit gap for India and others. However, the economics of it remained to be vetted as Iran and Russia offered to provide significant discounts. By importing oil from Russia, India was not only able to stabilise the global crude supplies and prices but also reportedly saved $26 billion.

Iran is the second-largest source of petroleum for India and surely a major economic and energy partner. Exclusive Economic Zones of India, Iran, Pakistan and Oman provide a maritime contiguity in north Arabian Sea. Iran is also extremely important for India for its connectivity to Afghanistan and Central Asia as well as for its North-South Corridor. Hence, in order to counter China-Pakistan designs, India strategically invested significantly in the Iranian Chabahar Port and committed over $500 million for extending connectivity to Central Asia. There are oil and gas pipeline projects like TAPI (Turkmenistan-Afghanistan-Pakistan-India) and IPI (Iran-Pakistan-India), which have been held up due to regional faultlines.

During the visit of former President Rouhani (February 17, 2018) to India, the joint statement ‘Towards Prosperity through greater Connectivity’ released by the two sides reiterated their common resolve to further intensify and strengthen multifaceted cooperation, recalling the “New Delhi Declaration” of January 23, 2003. Consequently, not only did Iran agree to increase the pace of negotiations for the Farzad B gas field (later withdrawn from ONGC Videsh in 2021), but both sides agreed to hold dialogues between their Defence and National Security Council structures and move beyond a traditional buyer-seller relationship to a long-term strategic partnership. Nine memoranda of understanding (MoU) and agreements, including the Lease Contract for Shahid Beheshti Port-Phase 1 of Chabahar during the interim period between IPGL and Iran’s PMO, were signed. More importantly, dialogue between Defence and National Security Council structures and all the institutional mechanisms were directed to be revived to full steam in a year’s time. A new beginning was made, but a few months down the line, challenges awaited with changes in the U.S. dispensation.

VITAL PARTNER: Iran is a major economic and energy partner. In the past, major projects were discussed involving India and Iran such as TAPI (Turkmenistan-Afghanistan-Pakistan-India) and IPI (Iran-Pakistan-India).
| Photo Credit:
AFP

Sanctions on the strategic Chabahar port have had their own story, and only recently, President Trump had threatened that he would no longer allow any waivers. India had begun to plan its investments in the port as it had secured the 10-year management contract, which provides some predictability. India also worked with Iran and other partners to integrate the Chabahar port with the INSTC, which will make it easier. Also, India’s recent outreach to Taliban-led Afghanistan makes it imperative for India and Iran to cooperate. Taliban’s very first foreign investment of $35 million will be in the Chabahar port project as it provides them with secured connectivity, given the adversarial relationship with its erstwhile supporter, Pakistan. Therefore, it is vital that India undertakes serious and overt action with regard to its plan for the Chabahar project.

One of the key disappointments that Iran often laments against Indian commitment was to build and finance the Chabahar-Zahedan railway line connectivity, which it did not fulfil. Eventually, Iranians decided to do it themselves. Besides, they often — in private and public conversations — raise the issue of India’s strategic autonomy, which they respect, as to why India stopped buying Russian oil and limited its engagements while it was not deterred in its purchases of crude etc., from Russia, which is also under heavy sanctions and in recent times, led to being sanctioned by President Trump in the form of additional tariffs of 25%. Strategic autonomy has costs, and India is ready to bear it since these impositions are unreasonable and uncalled for and myopic in nature.

Mr. Modi had also declared India’s independent foreign policy choices, stating that if India wants to buy oil from Iran, then it will buy. However, the difficulties being faced by Indian banks, insurance and oil companies began to manifest. The Israeli Ambassador gleefully tweeted a Reuters report stating that Indian HPCL (Hindustan Petroleum Corporation Limited) had cancelled the purchase of an Iranian oil cargo after its insurance company refused to extend the insurance coverage in view of the U.S. sanctions. The State Bank of India had earlier taken a conscious business decision not to continue dealing with Iranian business enterprises in view of its much larger stakes elsewhere.

India may continue to pursue waivers with the U.S. authorities, as is being done for CAATSA, as far as arms purchases from Russia are concerned. Giving up the Iranian option will compromise India’s strategic choices and hurt national interests. Alternative payment methods through rupee, rial or barter, as well as using Iranian, European or Russian and Chinese banks or for that matter, BRICS institutions, could be the way forward to tide over the problem.

Strategic autonomy wanting

Speaking at Westminster, U.K., on April 18, 2018, it was perhaps the first time that India’s recent independent foreign policy, driven by a robust India and her national interest, was expounded in no uncertain terms by Prime Minister Modi in his “Bharat ki Baat Sabke Saath”. Apart from speaking about the decisive surgical strikes against the terrorists across the western border, the Prime Minister said, “What prevented Indian Prime Ministers from going to Israel? Yes, I will go to Israel, and I will even go to Palestine. I will further cooperate with Saudi Arabia, and for the energy needs of India, I will also engage with Iran.”

The fact that he specifically chose to refer to West Asia and Iran clearly underlines the importance India attaches to our relations with the region, but with a fine-tuned de-hyphenation. Although India’s engagement with the Middle East or West Asia is often termed as “Look or Link West” but, in reality, it is one of the most successful foreign policy achievements of the Modi government in India’s extended neighbourhood.

As for Iran, the visit of former President Rouhani was significant and clearly indicated that India carries on its bilateral relationships in an independent manner and in pursuance of her national interests. The joint statement said, “Noting the complementarity of interests and natural partnership in the energy sector, it was agreed to move beyond traditional buyer-seller relationship and develop it into a long-term strategic partnership. Both sides agreed to continue and increase the pace of negotiation for reaching appropriate results on energy cooperation, including Farzad B gas field. President Rouhani and Prime Minister Modi agreed to further intensify and diversify the existing high-level engagement through frequent and wider range of bilateral exchanges at all levels. In this context, it was decided to convene within this year the meeting of the India-Iran Joint Commission and all its Working Groups, Foreign Office Consultations, dialogue between defence and National Security Council structures of the two countries, Policy Planning dialogue, and to promote Parliamentary exchanges.” Mr. Modi commented that “Today’s results and the agreements that we have signed are indicative of the progress made in the last few quarters. This reflects the desire from both sides that we want to increase our bilateral economic cooperation. We want to further enhance connectivity, we want to increase partnership in the field of energy and want to further strengthen our centuries-old cultural relations.”

“We agree that the partnership between India and Iran is in the interest of peace, prosperity and stability in this area,” he added. We are rapidly moving towards further enhancing our regional connectivity.

India continued to buy oil from Iran and made the U.S. understand the logic and reason behind serving its own national interest and strategic autonomy, as well as the importance of mutually beneficial outreach to Afghanistan. The U.S. eventually granted the requisite waivers, while maintaining pressure through prescribed timelines. But then, Mr. Trump decided to end it all.

Competitive and collaborative matrix

While efforts have been made by both sides through mature and pragmatic ways and regular high-level exchanges to keep the bilateral relationship going and progressing wherever possible, despite sanctions, they have also collaborated in several other fora and trilateral mechanisms. The Indian Vice President paid condolences on the death of the Iranian President in a helicopter crash. Mr. Jaishankar happened to be the first foreign leader to convey India’s greetings to President elect Masoud Pezeshkian. Several important institutional dialogue mechanisms have been operating reasonably well, but could be more focused and result- oriented. Annual political consultations at the level of Director Generals in the foreign ministries were held on September 9, 2025, when a complete review of the whole gamut of relations was undertaken.

India-Armenia-Iran is one such mechanism that complements India’s Connect Central Asia Policy with the Caucasus, especially the South Caucasus, which is going through its own rapprochement with the help of President Trump. Iran is also part of BRICS and SCO, and their membership quest was strongly supported by India. In an unusual stance, India, Pakistan, Iran and Russia, as well as China, had recently opposed the U.S. designs of regaining the strategic Bagram air base in Afghanistan. India also welcomed the rapprochement between Saudi Arabia and Iran — brokered by Iraq, Oman and China, since it could lead to regional stability, which is critical for India’s own wellbeing and interests, apart from being beneficial to the region. Iranians do understand India’s policy of dialogue, diplomacy and de-hyphenation, but have their concerns with regard to India’s strategic partnership with Israel and the U.S.

India also has certain concerns about China-Iran strategic 25-year partnership envisaging some $400 billion in investments. However, Tehran strongly appreciates China standing up to pressure and continuing to buy Iranian oil through innovative means, defying the U.S. diktat. It expected India to do likewise. In addition, another grouping that is emerging — especially in the security arena — pertains to CIRN (China- Iran-Russia and North Korea) and that might have its own dynamic and regional geopolitical implications for New Delhi. Iran is also a key partner in the Chinese Belt and Road Initiative (BRI). In the wake of Israeli and U.S. strikes last June, Iran is keen to buy Chinese military and reconnaissance weapons and equipment. Moreover, being in the North West Indian Ocean region, Iran is an important player in the Indo-Pacific and the Indian Ocean, with its strategic chokepoints like threats of closing the Strait of Hormuz. If they veer too much to Chinese and Russian positions, that could hamper Indian interests.

Iran and Pakistan’s relations have a love-hate dimension to them. In recent times, they have attacked each other for spawning Baloch groups inimical to one or the other. Iran is also trying to mediate between Pakistan and Afghanistan after the recent skirmishes, even as Türkiye and Qatar remain major actors in these difficult negotiations. On the other hand, after the signing of the Strategic Mutual Defence Agreement (SMDA) between Pakistan and Saudi Arabia, consequent to Israeli strikes on Qatar, the Iranians appear keen on joining the Saudi initiative with Pakistan, which will have its own repercussions in the Middle East for India. Even an OIC-NATO is being envisaged.

During the dastardly Pahalgam terror attacks by a Pakistan-based terror group, Iran condemned the strikes in no uncertain terms but they worked for de-escalation between India and Pakistan, and the Iranian Foreign Minister even visited India to act as an interlocutor, which India declined since it was a bilateral issue between Delhi and Islamabad.

Likewise, in the wake of the Iran-Israel war and U.S. attacks on Iranian nuclear installations, President Pezeshkian called Prime Minister Modi to brief him on the evolving situation (on June 22). Mr. Modi expressed India’s deep concern at the recent escalations and conveyed that India was on the side of peace and humanity. In this context, he emphasised the need for immediate de-escalation, dialogue and diplomacy as the way forward. He reiterated India’s support for early restoration of regional peace, security and stability. The Prime Minister also thanked Iran for the safe evacuation of over 3,500 Indians under Operation Sindhu.

On the P2P levels also, Iran has taken an anti-Indian stance in certain cases, which has not been viewed favourably. In the wake of the Delhi riots in March 2020, strangely, Tehran advised Delhi to stop the massacre of Muslims in order to prevent India’s isolation from the world of Islam, keeping company with Türkiye, Pakistan and Malaysia. The Shia population in India does look up to the religious leadership of Ayatollah Ali Khamenei and has often protested against Western and Israeli actions against Iran. India advised them not to make irresponsible comments driven by selective and unsubstantiated narratives. However, this will come up again and will require a sound communication strategy, especially the projection of India’s own Islamic credentials in the Middle East.

KEY INVESTMENT: A container is loaded on to the Cosco Wellington, the first container ship to depart after the inauguration of the China-Pakistan Economic Corridor port in Gwadar, Pakistan, November 13, 2016. Chabahar is a strategic port as against the Sino-Pak CPEC (China-Pakistan Economic Corridor), with Gwadar just across it.
| Photo Credit:
Reuters

Going forward

India and Iran have a historic and civilisational connection and a significant Shia population in several parts of India. P2P connect is the key to the relationship, despite geopolitical and geoeconomic fault lines in the West Asian region and beyond. Physical connectivity and corridors and dependability are key to India’s outreach to Afghanistan, Central Asia, Caucasus, Russia and Europe, even though there are alternative routes like the IMEEC, Chennai Vladivostok etc., that are being worked out. India has been the founding member of the INSTC. Chabahar is a strategic port as against the Sino-Pak CPEC (China-Pakistan Economic Corridor), with Gwadar just across it. It is important for India to be proactive in securing its strategic interests, generating confidence among the Iranians who appear keen to work closely with India, which provides them with their own strategic autonomy ambit. Not being proactive might yield space to China, which might impact our strategic interests in future. Commerce and trade, and investments are the key, and hence, to the extent possible, need to be encouraged through the creation of sanction-immune SPVs. Low trade levels are also impinging on the relationship adversely, despite banking and payment restrictions. We should focus more on non- sanctioned sectors like infrastructure, pharmaceuticals, agriculture and digital collaboration through DPI (Digital Public Infrastructure). However, defence, security and counter-terrorism cooperation could be re-initiated and advanced in earnest.

Of course, India will have to navigate Washington and Tehran’s hostile dynamic adroitly until such time that the extreme situation between the two sides settles down. Innovative ways will have to be found to overcome the limitations placed on us by the generically adverse relationship between U.S.-Israel and Iran. Perhaps an India-Saudi-Iran trilateral could be a useful conduit that might stunt the impact of several cross-currents from the U.S., Pakistan and Israel. A lot will hinge upon future leadership in Iran, U.S.-Iran JCPOA negotiations and our ability to leverage Chabahar port and the resumption of energy supplies. Hopefully, in this 75th anniversary of our diplomatic relations, India and Iran will be able to give a new meaning and substance to the bilateral engagement.

Anil Trigunayat is a former Indian Ambassador to Jordan, Libya and Malta and a Distinguished Fellow at the Vivekananda International Foundation and United Services Institute of India