New Delhi | June 2025 | www.externalaffairs.in
As West Asia stands at the precipice of conflict, India-Iran relations—anchored in deep-rooted civilizational ties and increasingly driven by strategic cooperation—gain renewed significance. In light of recent regional developments, including U.S.-Iran tensions and infrastructure imperatives like the Chabahar Port, India’s relationship with Iran assumes critical importance in its West Asia policy, energy security strategy, and Eurasian connectivity goals.
This explainer unpacks the key dimensions of the India-Iran bilateral relationship, drawing from the Ministry of External Affairs (MEA), past joint declarations, and credible reports.
1. Historical & Civilizational Bonds
India and Iran share a millennia-old relationship, shaped by cultural, linguistic, and spiritual intermingling—from the spread of Persian influence in Mughal India to shared Sufi traditions and trade via the Silk Route. This foundation underpins the depth and resilience of modern-day India-Iran ties.
2. Political and Diplomatic Engagements
India and Iran signed a Friendship Treaty in 1950, marking the formal beginning of modern bilateral relations. The ties were deepened through landmark visits:
- 2001: PM Atal Bihari Vajpayee's visit to Tehran led to the Tehran Declaration.
- 2003: Iranian President Mohammad Khatami’s visit to New Delhi produced the New Delhi Declaration.
- 2016: PM Narendra Modi’s visit to Iran culminated in the signing of a Trilateral Agreement with Iran and Afghanistan on trade and transit, particularly via Chabahar.
- 2018: Iranian President Hassan Rouhani’s visit led to the joint statement “Towards Prosperity Through Greater Connectivity.”
Recent high-level interactions:
- 2024: PM Modi met President Masoud Pezeshkian during the BRICS Summit in Kazan.
- May 2024: Vice President Jagdeep Dhankhar visited Iran to attend state funeral events following the tragic demise of President Raisi and Foreign Minister Amir-Abdollahian.
- 2024: Ministers Sarbananda Sonowal and Nitin Gadkari represented India at critical bilateral events including the signing of the long-term Chabahar Port agreement and the inauguration of President Pezeshkian.
- 2024: EAM Dr. S. Jaishankar visited Tehran to reaffirm cooperation in energy, security, and connectivity.
India and Iran maintain strong parliamentary-level engagement and institutional frameworks including:
- Foreign Office Consultations (FOC)
- Joint Committee Meetings (JCM)
- National Security and Consular Dialogues
- Sectoral Joint Working Groups (energy, culture, shipping, trade, etc.)
3. Connectivity: Chabahar and the International North-South Transport Corridor (INSTC)
The Chabahar Port, located in southeastern Iran, is India’s most strategically significant infrastructure project in West Asia. Under a 2015 MoU, India pledged development and operational support to Shahid Beheshti Port Terminal.
- In May 2024, a 10-year contract was signed between India Ports Global Ltd (IPGL) and Iran’s Ports and Maritime Organisation (PMO) for long-term operations.
- Chabahar is envisioned as a gateway to Afghanistan, Central Asia, and Russia, bypassing Pakistan.
- India has also committed over $100 million in aid and infrastructure to improve surrounding rail and road links.
Chabahar is also expected to integrate with the INSTC, a 7,200-km trade corridor connecting India with Russia via Iran and Central Asia, dramatically reducing freight costs and time.
4. Trade and Economic Cooperation
Although sanctions and banking restrictions have periodically constrained trade, India and Iran remain important trade partners:
- Major Indian Exports: Basmati rice, tea, pharmaceuticals, textiles, machinery.
- Major Imports from Iran: Dry fruits (notably pistachios and almonds), urea, chemicals, and glassware.
Bilateral trade reached approximately USD 2.3 billion in FY 2022-23, with India’s exports rising sharply, even as crude oil imports have declined post-2019 due to U.S. secondary sanctions.
India has sought sanction-proof payment mechanisms through rupee-rial trade, Asian Clearing Union (ACU) settlements, and local currency arrangements.
5. Energy Ties: Past, Present, and Prospects
Until 2019, Iran was India’s third-largest crude oil supplier, offering favorable pricing and extended credit terms. Following U.S. withdrawal from the JCPOA and imposition of secondary sanctions, India stopped oil imports from Iran.
However, Iran remains crucial to India’s future energy diversification strategy, including:
- Resuming crude oil imports post-sanctions relief.
- Investment in Iran’s Farzad-B Gas Field (once awarded to ONGC Videsh).
- Exploring LNG import terminals on the Iranian coast.
6. Cultural and People-to-People Links
The cultural ties are fostered by the Swami Vivekananda Cultural Centre (SVCC) in Tehran, and multiple academic exchanges, including Persian language studies in Indian universities and cultural delegations during Nowruz and other festivals.
India is also home to thousands of Zoroastrians (Parsis) whose ancestral roots lie in Iran.
Tourism flows are modest but growing, with Iranians visiting Indian religious and educational sites and Indian pilgrims travelling to Qom and Mashhad.
7. Strategic and Regional Cooperation
Iran plays a critical role in India’s regional strategic calculus, especially as New Delhi seeks to:
- Counterbalance Chinese influence in Gwadar, Pakistan (part of CPEC).
- Strengthen engagement with Afghanistan post-Taliban withdrawal.
- Secure sea lines of communication (SLOCs) in the Arabian Sea and Strait of Hormuz.
Iran’s geopolitical location makes it a valuable partner for India in a multipolar regional order, despite occasional divergences over Pakistan or views on regional conflicts.
Conclusion: Enduring Yet Complex Partnership
India-Iran relations are rooted in shared civilizational history but shaped by contemporary geopolitical realities—sanctions, U.S. pressure, Chinese ingress, and regional instability. Yet, the strategic logic of cooperation remains intact, especially in connectivity, energy, and security.
As the West Asia region navigates turbulence, India must continue balancing strategic autonomy with proactive engagement, ensuring that Iran remains a stable partner in its broader Eurasian and Indian Ocean strategy.
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