Iran-India relations are far-reaching and multidimensional. However, a variety of issues, including the upheaval in the Middle East and North Africa, U.S and Israeli influence over the region, Iran-Israel belligerence, and terrorism all constrain bilateral diplomacy.

Historically, Iran and India have shared social, political, and economic ties. Until the British colonization of India, the court language of India was Persian. During colonization, relations between India and the rest of the world were subject to drastic changes, and consequently between Iran and India decreased. Postcolonial political and cultural ties between the Shah of Iran and India were strong.

The Iranian Revolution of 1979 then restructured Iran’s relations with the rest of the world. Iran’s seizure of U.S. diplomats as hostages, the death sentence assigned to Salman Rushdie, rhetoric toward Israel, support for Hezbollah and Hamas, and the Iran-Iraq War all isolated Iran from the global community. Indeed, most of the world sees Iran as a hostile country that is resistant to change. Accordingly, the Iran-India relationship has been checkered. With the wave of Western sanctions imposed on Iran, relations between the two countries are likely to become even more complicated. However, leaders of both nations have tried to expand ties in a number of areas, including counterterrorism, regional stability, and energy security.[1]

India's Approach to Iran

India’s foreign policy after its independence in 1947 can be divided into three periods.

In the first period, from 1947-1990, the country’s policy was marked by “Nehruism,” or nonalignment with the superpowers and coalition with Third World countries.

In the second period, from 1991-2001, neoliberal ideas and economic reform became a priority. India’s fundamental objectives were to acquire advanced technology, resolve political disputes with neighbors, and hasten globalization. 

In the third period, from 2001 to the present, India’s foreign policy focus has shifted from economics to security. Military power and defensive capabilities have taken a more prominent role. India also seeks interaction with superpowers, greater influence in global affairs, and a permanent seat on the UN Security Council.[2]

Several key issues shape the Iran-India relationship. Iran and India have the largest and the fourth largest Shi`i Muslim populations in the world, respectively. Therefore, they share a mutual concern over Sunni-Shi`i conflicts, especially in Pakistan. Through emphasizing these conflicts, New Delhi sees an opportunity to limit Pakistan's influence in international Islamic forums. In addition, Iran’s geopolitical position is significant for India, as it can counteract China's increasing presence throughout Asia and boost India's regional influence. New Delhi is working with Tehran to open the Iranian port of Chabahar. The development of this port as well as Indian investment in infrastructure along Iran's border with Afghanistan not only helps India to counter the massive Chinese investment in Pakistan's Gwadar port but also boosts India's influence in Afghanistan, which counters Pakistan's influence there. Lastly, Iran is rich in oil and gas reserves and thus can help meet India’s domestic energy needs and aid it in avoiding an over-reliance on Saudi Arabia, which has had traditionally close ties with Pakistan.[3]

Iran’s Approach to India

Iran considers India significant for a number of reasons. First, India, like Iran, is an Asian country, and the two share historic, cultural, and ethnic links. India's foreign policy is also congruent with that of Iran; they are both opposed to U.S. unilateralism and a unipolar world.[4] Following the New Delhi Declaration of 2003, Iran and India referred to each other as “strategic partners” and embarked on joint military exercises. However, Iran cannot expect India to favor it in global and security issues, especially in its nuclear issue.  

Cooperation and Convergence

Given their affinities, there are various areas of potential cooperation for Iran and India.

International Structure

Both countries are looking to revise the global security equation and the structure of international security. Iran objects to the world management model, especially the UN Security Council structure. India, for its part, as a nascent great power, is seeking a permanent seat on the Council. Because the two countries are outsiders in regard to this structure, they are brought together.

Economics

India is under pressure from its Western allies vis-à-vis its relationship with Iran, yet India's sustained economic growth makes Iran's economic cooperation and energy indispensable.[5] However, international sanctions have caused a decline in Iranian oil exports to India. In the first seven months of 2013, India's crude oil imports from Iran fell 46 percent compared with the same period last year. As payment to Iran is in rupees rather than dollars, India could save $8.5 billion in the 2013-14 fiscal year if it was able to continue importing Iranian oil at the same rate as before.

The Iran-Pakistan gas pipeline, also known as the Peace Pipeline Project, is under construction and will deliver natural gas from Iran through Pakistan and to New Delhi. If implemented, it could not only augment India’s influence in the Middle East and Central Asia but also diversify its energy basket. The project could also boost and deepen Iranian economic diplomacy and political influence in the Indian subcontinent. In this way, energy is the main field of cooperation between the two countries.

Yet, after 2005, the American variable entered into the Iran-India relationship equation, with India seeking closer ties with the West. In spite of Iran and India’s talks and discussions about the pipeline, India's foreign policy drastically changed, and progress on the project has halted.[6]

Stability and Regional Security

One of the top security issues for India is Pakistan, as the two neighbors have a long relationship of animosity. Communal tension and violence between Hindus and Muslims have risen in some areas of India over the past decade, and India's growing relationship with Israel and the United States, which has brought about domestic criticism, has prompted India to reinforce its ties with the Muslim world. Iran can be helpful to India by providing it with a Muslim partner that acts as a counterbalance to Pakistan, and thus Iran presents a potential strategic advantage for India.

International Terrorism

Tehran and New Delhi are both concerned about the spread of pernicious Sunni Islamist militias in South Asia and the revival of Wahhabi power in Asia and the Middle East. This concern led to the establishment of a joint committee in 2003 targeted at eliminating terrorist activities, gun trafficking, and the narcotics trade. During the Taliban era, when Iran was under a serious threat from both Pakistan and Afghanistan, it decided to expand its cooperation with India and Russia, and even helped the United States to overthrow the Taliban. India and Iran welcomed the Taliban's demise in October 2001 and made Afghanistan's reconstruction and stability a common, critical goal. Thus, counterterrorism can be a significant area for convergence and integration between the two countries.[7]

Strategic and Defense Cooperation

One of the most significant provisions of 2003’s New Delhi Declaration sought to upgrade defense cooperation between Iran and India. The wide-ranging partnership involved all three military services: the army, navy, and air force. After the Iran-Iraq War, Tehran rebuilt its conventional arsenal by purchasing tanks, combat aircraft, and ships from Russia and China. It also reportedly solicited Indian assistance in 1993 to help develop new batteries for three Kilo-class submarines it had purchased from Russia. The submarine batteries provided by the Russians were ill-suited to the warm waters of the Persian Gulf, and India had substantial experience operating Kilo-class submarines in warm water. Iran remains inclined to acquire Indian assistance for other upgrades to its Russian-supplied military hardware, including MiG-29 fighters, warships, and tanks.[8]

However, despite these initiatives, strategic and defense cooperation between the two countries is relatively low. The reason for this is India’s turn to the West.

Conclusion

Realistically, India should make it a priority to expand and deepen its ties with the United States. Politically, the United States has announced its commitment to the process of making India a global power, and militarily, the U.S army is looking to India as a military partner to implement its short-term operations in Asia.

India has already begun to choose the United States over Iran, and will likely continue to do so. In terms of strategic affairs, such as Iran's nuclear program, India has acted in conformity with U.S policies. When more of such changes occur in India’s foreign policy toward Iran, they may come as a surprise to Iranian politicians, who still view India as neutral and non-aligned, especially in regard to Third World countries. Iran also expects India, as a developing country, to have a revisionist or reformist outlook toward the politico-economic structure of the international system.