India-Iran ties are shaped around energy, Central Asia and security (mostly around Pakistan-Afghanistan region). These are currently being influenced by hostile relations between the US and Iran and also many other Gulf neighbours, including Israel. Yet, Iran, amid the growing tensions between India and China, remains strategically important for New Delhi. Despite pressure from the US, India is treading a fine path notwithstanding Tehran’s strong and persistent criticism. However, there is a possibility of improved Iran-China relations, which is a threat to India’s strategic interests. A sound multilateral approach to address these issues is a need of the hour.
In 2019, Indian firm “India Ports Global Limited” took over operations at the Shahid Behesti Port in Chabahar, Iran. The representative of India, Iran, and Afghanistan met and finalized the routes for trade and transit corridors between the three nations. An event, ‘Chabahar Day’ was organised on February 26, 2019, to promote and popularise the potential of Chabahar port. Recently, the Iranian government took several decisions that may impact India’s Central Asian Strategy.
The strait of Hormuz plays a vital geopolitical role to the point where the US Fifth Fleet guards this strait. But during the recent days, Iran has threatened the safe passage of oil tankers in this strait in response to the crippling unilateral sanctions placed on its economy by the Trump Administration.
The United States has broadly agreed to grant India and 7 other countries a waiver from the sanctions it re-imposed on Iran recently. This decision provides some temporary relief to India and avoids any major oil price shocks.