India-Iran relations are among the oldest continuous relationships between two civilisations in Asia. Persian and Indian cultures have exchanged language, art, architecture, cuisine and religious ideas for more than two thousand years, and in the modern era the two countries have been linked by energy trade, transit ambitions and a shared interest in the stability of Afghanistan and Central Asia. Today the relationship is shaped by a delicate mix of opportunity, such as the Chabahar Port and the International North-South Transport Corridor, and constraint, such as international sanctions on Iran.
India has to balance this partnership with its ties to the United States, Israel and the Gulf Arab states, while Iran manages its own complicated regional environment. This explainer outlines the history, the economic and strategic projects, the effect of sanctions on oil trade, and the cultural bonds, in a neutral and factual manner.
| Fact | Detail |
|---|---|
| Modern diplomatic ties | Treaty of Friendship signed on 15 March 1950 |
| Civilisational links | Over two millennia of exchange; Persian was a court language in India for centuries |
| Strategic port | Chabahar, on Iran’s Makran coast in the Gulf of Oman |
| Transit corridor | International North-South Transport Corridor, agreed in 2000 |
| Key declarations | Tehran Declaration (2001) and New Delhi Declaration (2003) |
| Energy | Iran was historically among India’s major crude oil suppliers until sanctions curbed imports |
| Bilateral trade items | Indian basmati rice, tea, pharmaceuticals and machinery; Iranian crude, dry fruits and chemicals |
| Multilateral overlap | Both belong to the SCO and BRICS |
Civilisational Roots of India-Iran Relations
The Indian subcontinent and the Iranian plateau have been neighbours and trading partners since ancient times. The Achaemenid empire ruled parts of north-western India in the sixth century BCE, and Greek and Persian sources describe the Indus region as part of its domain. The Avestan language of Zoroastrian scripture and the Vedic Sanskrit of the Rig Veda share remarkable similarities, which scholars take as evidence of a common Indo-Iranian heritage.
In later centuries, Persian influence spread across India through trade, migration and the rise of Muslim dynasties. Persian became the language of administration and high culture under the Delhi Sultanate and the Mughal empire, and it remained the language of the court until the nineteenth century. The poetry of Amir Khusrau, Mirza Ghalib’s Persian verse and the courtly arts all reflect this shared tradition.
Cultural inheritance
- Language: Thousands of Persian words are part of Hindi, Urdu, Punjabi, Bengali, Gujarati and other languages, ranging from everyday terms to administrative vocabulary.
- Art and architecture: Mughal garden design, miniature painting, carpets and domed tombs developed through Persian influence.
- Food and music: Biryani, kebabs, saffron dishes and classical music forms have Persian connections.
- Parsi community: Zoroastrians who left Persia settled in Gujarat around the eighth to tenth centuries and became the Parsis, a small but influential Indian community.
Modern Diplomatic Foundations
India and Iran signed a Treaty of Friendship on 15 March 1950, shortly after the Indian republic was established. In the decades that followed, relations were warm at the cultural level but more complicated at the political level. During the Cold War, India followed non-alignment while Iran, under the Shah, was a close ally of the United States and a member of the Baghdad Pact, later CENTO, which placed it in a different camp from India. Iran’s closeness to Pakistan in some periods, including during the wars of the 1960s and 1970s, also complicated the relationship.
The Iranian Revolution of 1979 changed Iran’s orientation. In the 1990s, India and Iran began to find more common ground, driven by shared concern about instability in Afghanistan, in particular the rise of the Taliban in the mid-1990s, and by the opening of opportunities for energy and trade. Both countries supported the Northern Alliance in Afghanistan in the late 1990s, along with Russia.
The Tehran and New Delhi Declarations
Two political documents shaped the relationship in the early 2000s. The Tehran Declaration, signed during the visit of Prime Minister Atal Bihari Vajpayee to Iran in April 2001, set out a vision of cooperation in energy, trade, connectivity and regional security. In January 2003, Iran’s President Mohammad Khatami was the chief guest at India’s Republic Day celebrations, and the two governments signed the New Delhi Declaration, which committed them to a strategic partnership in areas including defence cooperation, energy and the fight against terrorism.
These documents also referred to the creation of a transit link, which would allow Indian goods to reach Central Asia, Russia and Afghanistan through Iranian territory, bypassing Pakistan. This idea was later connected with the Chabahar Port and the International North-South Transport Corridor.
Chabahar Port: India’s Gateway
Chabahar, on the Makran coast in Iran’s Sistan and Baluchestan province, is the only Iranian port with direct access to the open ocean. It lies outside the Strait of Hormuz and is relatively close to India’s western coast. For India, Chabahar offers a route to Afghanistan and Central Asia that does not depend on land transit through Pakistan.
Key milestones
| Period | Development |
|---|---|
| 2003 | India and Iran agree in principle to develop Chabahar |
| 2009 | India completes the Zaranj-Delaram highway in Afghanistan, connecting to Iran’s road network |
| 2016 | During Prime Minister Narendra Modi’s visit to Tehran, India, Iran and Afghanistan sign a trilateral transit agreement; India commits to equipping and operating a terminal at Chabahar |
| 2017 | First shipments of wheat sent from India to Afghanistan through Chabahar |
| 2018-2019 | India Ports Global takes over operations at the Shahid Beheshti terminal |
| 2024 | A long-term, ten-year contract for terminal operations is signed |
The project has faced delays and uncertainty caused by sanctions, financing concerns and changes in Afghanistan’s political situation after 2021. A planned railway link from Chabahar to Zahedan, which India’s state-owned rail company had agreed to help build in 2016, did not proceed as originally planned. Nonetheless, Chabahar has been used to ship humanitarian aid and goods, and it remains a central element of India’s connectivity diplomacy.
International North-South Transport Corridor
The International North-South Transport Corridor, or INSTC, was agreed in St Petersburg in September 2000 by India, Iran and Russia, and it has since expanded to include a number of other members, including Central Asian and Caucasus states. It is a multi-modal network of ship, rail and road routes designed to shorten the distance and the time needed for cargo moving between the Indian Ocean and northern Europe.
How the corridor works
- Goods travel by sea from Indian ports such as Mumbai to Iranian ports on the Gulf, including Bandar Abbas and Chabahar.
- They then move by rail or road across Iran to the Caspian Sea.
- From there they go by ship or rail through Azerbaijan or Central Asia to Russia and beyond.
Supporters say that the route can reduce transit time and cost compared with the traditional Suez Canal route, though the corridor has faced challenges, including incomplete rail links, differing customs procedures and the effects of sanctions. Completion of missing segments, particularly rail links in Iran and Azerbaijan, has been a subject of continued negotiation.
Energy Ties and the Impact of Sanctions
Energy has been the backbone of trade. Iran holds some of the world’s largest reserves of oil and natural gas, and India, as one of the world’s largest importers of crude, was for many years a major buyer of Iranian oil. Indian refiners found Iranian crude convenient because of the short shipping distance and favourable credit terms.
International sanctions have repeatedly disrupted this trade. In the early 2010s, tougher United States and European measures, linked to Iran’s nuclear programme, made it difficult for Indian companies to pay for Iranian oil, and imports were scaled down. Following the nuclear agreement of 2015, known as the Joint Comprehensive Plan of Action, trade picked up again. After the United States withdrew from that agreement in 2018 and reimposed sanctions, waivers allowing India to buy Iranian oil lapsed in 2019, and Indian purchases stopped. Since then, India has sourced crude from many other suppliers, while Iran’s share has dropped sharply.
A planned gas pipeline from Iran to India, which would have passed through Pakistan, never materialised because of security, pricing and political concerns. Indian companies also took part in the exploration of the Farzad-B gas field in the Persian Gulf, but progress was slow and uncertain.
Balancing Act: The United States, Israel and the Gulf
India’s foreign policy rests on strategic autonomy, and its relationship with Iran has to be balanced against its other partnerships. India has strong economic, defence and technology ties with the United States, close relations with Israel, and deep economic and diaspora links with Saudi Arabia, the United Arab Emirates and other Gulf Cooperation Council states, where millions of Indians live and work and from which India obtains large amounts of energy and remittances.
- Nuclear votes: India voted for resolutions at the International Atomic Energy Agency in 2005 and 2006 that referred Iran’s nuclear file to the UN Security Council, a decision that attracted domestic debate and Iranian disappointment.
- Sanctions compliance: Indian public-sector and private companies have generally followed US and international sanctions, while seeking exemptions for humanitarian trade and for Chabahar.
- Regional conflicts: India has typically called for restraint, dialogue and respect for sovereignty when conflict involving Iran, Israel or the Gulf has flared up, and has been concerned about the safety of Indians in the region and the security of shipping through the Strait of Hormuz.
- Kashmir and the OIC: Iranian statements about Kashmir have from time to time created friction, and India has sought to keep this issue separate from the broader relationship.
Observers note that Iran has its own balance to maintain, including its relations with Pakistan, China and Russia, and that Chabahar has also been presented by Iran as a means of drawing in investment from multiple partners.
Trade, Connectivity and Multilateral Cooperation
Non-oil trade between the two countries has centred on agricultural and industrial goods. India has long been a major supplier of basmati rice to Iran, which is one of the largest buyers of this product, along with tea, sugar, pharmaceuticals, meat and machinery. India imports dry fruits, chemicals, fertilisers and some other products from Iran.
Payments have been difficult because of sanctions on Iran’s banking system, and the two sides have tried different mechanisms, including rupee-based trade, to continue commerce in food and medicine. Both countries joined the Shanghai Cooperation Organisation as full members in 2017 and 2023 respectively, and Iran joined the BRICS group in 2024, giving them additional platforms for dialogue. They have also cooperated in the Afghanistan context, including by participating in regional consultations.
Cultural and People-to-People Links
Cultural diplomacy remains a strength. India has a large Shia Muslim population, and large numbers of Indian pilgrims visit shrines in Mashhad, Qom and Iraq each year. Cities such as Lucknow and Hyderabad have deep Persianate and Shia traditions. Iranian students study in Indian universities, particularly in Pune, Hyderabad and Delhi, and Persian is taught at many Indian universities. The Indian Cultural Centre in Tehran and Iranian cultural centres in India organise festivals, lectures and exhibitions.
The Iranian new year, Nowruz, is celebrated in parts of India by the Parsi community and others, and Yoga Day events have been held in Iran. Indian cinema and Iranian cinema have long admired each other, and writers and historians in both countries have worked to document the shared past.
Challenges and Prospects
The main challenge is the external environment. Sanctions, regional rivalries and shifting alliances limit the scope of cooperation and make investment decisions cautious. Another is the pace of project delivery, as seen at Chabahar and on the North-South corridor. The two sides, however, still see value in the relationship, particularly as India seeks resilient trade routes and Iran seeks partners to ease its economic isolation.
Prospects depend largely on developments in Iran’s relations with the West, the security situation in the Gulf and Afghanistan, and the ability of both countries to put connectivity projects into practice. Even if relations remain at a modest level in the short term, the cultural, geographic and strategic factors that bind the two countries are enduring.
Conclusion
India-Iran relations combine deep cultural kinship with a pragmatic and sometimes constrained modern partnership. Chabahar and the International North-South Transport Corridor show how geography can create shared interests, while sanctions and regional competition show how external factors can limit them. For India, Iran remains a valuable gateway to Central Asia and a historical partner; for Iran, India is a large market and a friendly power that has maintained contact in difficult years.
Frequently Asked Questions
Why is Chabahar Port important for India?
Chabahar gives India access to Afghanistan and Central Asia without passing through Pakistan. It is an Iranian port outside the Strait of Hormuz, and India has invested in developing and operating a terminal there under agreements signed in 2016 and 2024.
What is the International North-South Transport Corridor?
It is a multi-modal trade route agreed in 2000 by India, Iran and Russia, linking the Indian Ocean to the Caspian Sea and northern Europe by ship, rail and road. It is intended to cut transport time and cost compared with the Suez route.
How have sanctions affected India-Iran oil trade?
US and international sanctions have repeatedly restricted Iran’s oil exports. India reduced imports in the early 2010s, resumed some purchases after the 2015 nuclear deal, and stopped buying Iranian oil in 2019 when US waivers ended.
How does India balance its ties with Iran, the United States and the Gulf states?
India follows a policy of strategic autonomy, maintaining good relations with all of them. It generally complies with international sanctions, seeks exemptions for projects like Chabahar, and urges dialogue when regional tensions rise.
What cultural links exist between India and Iran?
The two civilisations share Indo-Iranian linguistic roots, centuries of Persian influence on Indian language, art, music and cuisine, and the Parsi community, which descends from Zoroastrians who came from Persia. Shia pilgrimages and academic exchanges continue the connection.
When did India and Iran establish formal friendship ties?
India and Iran signed a Treaty of Friendship on 15 March 1950. The relationship was later reinforced by the Tehran Declaration of 2001 and the New Delhi Declaration of 2003.
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