By Admin 
Iran is currently going through a serious political and economic crisis. The protests that broke out across the country have posed a big challenge to the government. The situation has become so bad that internet and mobile services have been banned in Iran. This crisis is not limited to Iran only, but it can also affect countries like India, whose strategic and trade interests are deeply linked to Iran. Meanwhile, US President Donald Trump has announced that an additional 25 percent tariff will be imposed on any country that does any kind of trade with Iran. In such a situation, this news is a matter of concern for India, because India is a business partner of Iran.
Why is Iran so important for India?
Iran is a very important part of India’s foreign and trade policy. Iran plays the role of a major transit hub in the projects in which India has invested to strengthen its reach to Central Asia, Russia and Europe. Especially Chabahar port located on the south-eastern coast of Iran is very strategically important for India.
Chabahar Port gives India a direct trade route to Afghanistan, Central Asia and Europe, bypassing Pakistan. This port is also an important part of the International North-South Transport Corridor i.e. INSTC. Through this route, India saves about 40 percent time and about 30 percent cost in export-import. If instability increases in Iran and Chabahar port is affected, India’s geo-economic strategy may suffer a major setback.
What will be the impact on India-Iran trade?
According to government data, bilateral trade between India and Iran stood at around $1.68 billion in the financial year 2024-25. In this, India exported $1.24 billion to Iran, while $0.44 billion was imported. In this way India got a trade profit of about 0.80 billion dollars. The major goods sent from India to Iran include rice, tea, sugar, medicines, electric machinery and artificial fibres. India imports dry fruits, chemicals and glass products from Iran. If the crisis deepens and Chabahar Port or INSTC route is disrupted, India-Iran trade may be directly affected.
Why may India’s problems increase on the oil and gas front?
Iran is among the world’s largest oil and gas producing countries. If the impact of the Iran crisis reaches the Strait of Hormuz, global oil supply could be severely affected. About 20 percent of the world’s crude oil is supplied through this route. India imports more than 80 percent of its crude oil needs. In such a situation, India’s import bill will increase due to increase in oil prices. This will have a direct impact on transportation costs, freight and inflation for the common people. Inflationary pressure in the country may further increase due to increase in the prices of petrol and diesel.
Why is stability in Iran important for India?
The ongoing crisis in Iran is not just a problem of a neighboring country for India, but it is a matter directly related to India’s trade, energy and strategic security. Issues like Chabahar Port, INSTC Corridor and oil supply are related to India’s long-term economic plans. If the situation in Iran worsens, India will have to be prepared for its far-reaching effects.
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