India – Iran Relations

Introduction

India and Iran share deep civilisational, cultural and economic bonds stretching back centuries. In the modern era, Iran matters to India on two great counts — as a source of energy and as a gateway to Afghanistan, Central Asia and Europe that bypasses Pakistan.

Yet the relationship is one of the hardest tests of India’s strategic autonomy. India must balance its Iran ties against its partnerships with the United States, Israel and the Gulf Arab states, all while navigating sanctions and a volatile West Asia. The result is a partnership of enormous potential, repeatedly constrained by external pressures.

Historical Evolution

Ties opened with the 1950 Treaty of Friendship and Perpetual Peace, but the Cold War split the budding allies: Iran joined the Baghdad Pact (1954) and CENTO, drawing close to Pakistan, to whom it gave military aid in the 1965 and 1971 wars. The 1979 Islamic Revolution reset the board — India stayed neutral in the Iran–Iraq war and kept importing oil.

Institutional ties deepened through the India–Iran Joint Commission (1983), and the strategic architecture was laid by the Tehran Declaration (2001) and the New Delhi Declaration (2003). Post-Cold War, both backed the Northern Alliance against the Taliban, and India increasingly saw Iran as its gateway to Central Asia.

Significance of the Relationship

• Energy security: Iran is a major, geographically close source of crude oil and gas for an energy-hungry India.
• Connectivity gateway: Chabahar and the INSTC give India overland access to Afghanistan, Central Asia and Europe, bypassing Pakistan.
• Afghanistan & counter-terrorism: a shared interest in a stable, terrorism-free Afghanistan and in countering extremism.
• Strategic autonomy: engaging Iran despite US pressure is a signal of India’s independent foreign policy.
• Regional balancing: Iran is part of India’s calculus in West Asia, alongside the Gulf Arab states and Israel.

Areas of Cooperation

(a) Port & Connectivity Diplomacy — Chabahar

The Chabahar Port, a deep-water port on the Gulf of Oman lying outside the Strait of Hormuz, is the crown jewel of the relationship. Conceived in 2003, advanced by a 2016 tripartite agreement (India–Iran–Afghanistan), it reached a milestone in May 2024 with a 10-year agreement for India to develop and operate the Shahid Beheshti terminal.

Chabahar overcomes the hostile geography India inherited at Partition, which cut off overland access to Afghanistan and Central Asia. It links to the Zaranj–Delaram road into Afghanistan and, via the planned Chabahar–Zahedan railway, to the wider International North–South Transport Corridor (INSTC) — a multimodal route to Russia and Europe that is faster and cheaper than the Suez Canal.

Why Chabahar matters — in one line Strategic access without Pakistan: Chabahar is India’s overland doorway to Afghanistan, Central Asia and Europe, and a counter to the Chinese-run Gwadar port nearby.

(b) Energy & Oil Diplomacy

Iran was long a top oil supplier — meeting nearly 12% of India’s oil imports until 2019, when US sanctions forced India to halt purchases and turn to costlier Gulf sources. Upstream cooperation centred on the Farzad-B gas field, discovered by ONGC Videsh (OVL), though development rights have been contentious.

Pipeline dreams persist: the Iran–Pakistan–India (IPI) pipeline (drawing on the South Pars field) was shelved over sanctions and security concerns, while an Iran–Oman–India undersea route has been explored as an alternative to transit through Pakistan.

(c) Trade, Strategic & Multilateral

• Trade basket: India exports rice, pharmaceuticals, tea and machinery; imports oil, petrochemicals and dry fruits.
• Counter-terrorism: intelligence-sharing and cooperation on regional security, especially in the Af–Pak region.
• Multilateral platforms: India supported Iran’s entry into BRICS, and both cooperate within the SCO.
• Civilisational & diaspora: the Parsi (Zoroastrian) heritage and shared Persian cultural influences anchor deep people-to-people ties.

Issues & Challenges

• US sanctions & JCPOA collapse: the stalled Joint Comprehensive Plan of Action (2015) and renewed US sanctions choke oil trade and delay projects like Chabahar and INSTC.
• Balancing the US, Israel & the Gulf: India’s deepening ties with Washington, Tel Aviv and the Gulf Arab states complicate its Iran engagement.
• Remarks on Kashmir: periodic comments by Iran’s Supreme Leader equating Kashmir with other conflicts have irritated New Delhi.
• The China factor: Iran’s 25-year strategic pact with China, and Chinese interest in Farzad-B, dilute India’s leverage.
• Iran’s regional posture: Tehran’s support for non-state actors and its confrontation with Israel keep West Asia volatile.
• Regional war risk: the 2025 Israel–Iran conflict and continuing tensions threaten shipping, energy flows and the INSTC.

Way Forward

• Insulate connectivity from geopolitics: fast-track Chabahar and the Chabahar–Zahedan railway, and operationalise the INSTC.
• Secure energy flexibly: keep long-term oil and gas options open, using sanctions waivers and diversified routes where possible.
• Practise skilful balancing: preserve strategic autonomy while managing ties with the US, Israel and the Gulf.
• Leverage multilateralism: use BRICS and the SCO to engage Iran on regional stability and Afghanistan.
• Deepen people-to-people ties: revive cultural and civilisational links to sustain goodwill through political cycles.

Conclusion

India–Iran ties sit at the intersection of energy, connectivity and geopolitics. Iran is an irreplaceable partner for India’s westward and northward reach — and Chabahar is the strategic anchor of that ambition. The relationship’s future turns on India’s ability to shield connectivity and energy from the swirl of sanctions and regional conflict, making it one of the truest tests of India’s strategic autonomy.