India-Iran Relations
Energy, Connectivity, and Strategic Interests
India-Iran relations are rooted in geography, energy dependence, and the desire to access Central Asia bypassing Pakistan. Iran was historically one of India's top oil suppliers before U.S. sanctions (imposed after 2018 "maximum pressure" policy) forced India to dramatically reduce Iranian oil imports. The Chabahar Port project — where India signed a 10-year operational contract in May 2024 to develop the Shahid Beheshti Terminal — is India's most significant strategic investment in Iran, providing an alternative trade corridor to Afghanistan and Central Asia that bypasses Pakistan. The International North-South Transport Corridor (INSTC) also runs through Iran.
- India and Iran established formal diplomatic relations on March 15, 1950.
- India was Iran's second-largest oil customer before U.S. sanctions; bilateral trade reached $17 billion at peak.
- Chabahar Port: India Ports Global (IPGL) signed a 10-year contract in May 2024 with Iran for Shahid Beheshti Terminal; USD 120 million committed for port equipment.
- Chabahar provides India access to Afghanistan and Central Asian markets, bypassing Pakistan's refusal to allow Indian transit.
- INSTC (International North-South Transport Corridor): 7,200 km multi-modal route connecting Mumbai to Moscow via Iran and Azerbaijan.
- India-Iran bilateral trade fell to $1.68 billion by 2026 under U.S. sanctions pressure; Chabahar funding dropped to zero in Union Budget 2026–27.
● Tracked since February 28, 2026 · last seen August 14, 2026 · updates as the daily brief publishes