TEHRAN- The capacities of the private sector, Chabahar Port, the North-South Corridor, and the joint membership of Iran and India in BRICS have created new opportunities for developing trade, investment, and expanded economic cooperation between the two countries.

According to a report by Mehr News Agency, Iran-India economic relations in recent years, despite possessing significant capacities, have faced a sharp decline in bilateral trade volume—a trend driven mainly by sanctions, banking restrictions, transportation difficulties, and changes in the two countries’ energy relations. Nevertheless, existing capacities in goods trade, medicine, agriculture, joint investment, and transit corridors can still pave the way for Tehran and New Delhi’s economic relations to return to a path of development.

In this context, India’s new ambassador to Iran, Shri Vishwesh Negi, at the start of his mission, visited the Tehran Chamber and met with its chairman. The two sides emphasized strengthening private-sector ties, expanding trade, and using BRICS capacities.

According to official Indian statistics, the two countries’ trade volume in the 2025-2026 fiscal year reached about $1.63 billion. Of this, about $1.25 billion was India’s exports to Iran, and about $370 million was India’s imports from Iran.

This figure is significantly far from the peak period in bilateral trade relations. Iran-India trade volume in the 2018-2019 fiscal year had reached about $17 billion, when Iranian oil exports to India held a substantial share of exchanges between the two countries.

After the tightening of U.S. sanctions and the halt of most Iranian oil purchases by Indian refineries, the structure of trade between the two countries changed, and exchange volume declined noticeably. As a result, trade between the two countries fell from about $17 billion in the 2018-2019 fiscal year to about $1.6 billion in the past fiscal year.

This decline shows that today’s issue in Iran-India economic relations is not merely increasing exports or imports of a specific product, but rather reviving a network of trade and investment cooperation that has been weakened in recent years by international restrictions.

With oil’s share in bilateral trade declining, agricultural, food, and pharmaceutical goods have gained greater importance.

Basmati rice is one of India’s most important export items to Iran and in recent years has accounted for a significant portion of India’s exports to the Iranian market. Official Indian statistics show that India’s basmati rice exports to Iran in the first 10 months of the 2025-2026 fiscal year reached more than 790,000 tons—a figure showing an increase compared with the same period last year.

Alongside rice, tea, sugar, fresh fruits, medicine, and pharmaceutical products are also among India’s important exports to Iran. In return, products such as pistachios, dates, apples, and kiwis are among Iran’s exports to India.

This structure shows that even under banking and trade restrictions, the two countries still have complementary markets in some areas of basic and consumer goods.

The pharmaceutical and medical equipment sector is also one of the areas that can help develop economic relations between the two countries. India is one of the world’s major pharmaceutical production hubs, and Iran, due to its domestic pharmaceutical industry and need for raw materials and some specialized products, is considered a significant market for Indian companies.

In this regard, cooperation between the two countries in health care and regulation of medical products has received attention in recent years, and capacities have been created for developing pharmaceutical and industrial cooperation.

The presence of Indian companies at Iranian specialized exhibitions can also provide the ground for direct company-to-company communication, identifying market needs, and moving from mere goods trade toward industrial cooperation and joint production.

Chabahar: most important Iran-India economic project

Among the economic projects of the two countries, Chabahar Port holds a different position. The port’s importance for India is not limited to trade with Iran; New Delhi sees it as part of its strategy for connectivity to Afghanistan, Central Asia, and Eurasian markets.

In 2024, India signed a 10-year contract with Iran for equipping and operating the Shahid Beheshti Terminal at Chabahar and committed to investing in the terminal’s development. Of course, India’s relationship with Chabahar Port has seen many ups and downs in recent years, but Chabahar is important in connection with the International North-South Transport Corridor—a corridor that can make India’s connection route to Iran, the Caucasus, Russia, and Central Asia shorter and more diverse.

Accordingly, the continuation of sanctions and changing conditions related to Chabahar sanctions exemptions are among the challenges facing India’s economic presence at this port. New Delhi has announced in recent months that it is in contact with various parties regarding Chabahar’s status.

BRICS: A new path for expanding cooperation

The simultaneous membership of Iran and India in BRICS has also created a new capacity for developing economic relations between the two countries. India holds the BRICS presidency in 2026, and the group’s economic programs have focused on increasing trade among members, strengthening supply chains, developing cooperation among small and medium-sized enterprises, and drafting an economic cooperation framework through 2030.

For Iran, presence in BRICS, in addition to political and multilateral capacities, was a platform for expanding ties with the group’s large member markets. India is also seeking to strengthen trade and investment among member countries and create new mechanisms for economic cooperation.

Meanwhile, one of the main challenges in Iran-India economic relations is the gap between government agreements and actual cooperation between companies. Under current conditions, increasing direct communication between chambers of commerce, holding B2B meetings, sending trade delegations, having companies participate in specialized exhibitions, and holding training courses can help identify real market opportunities.

In this regard, proposals have been made to draft a timetable for trade talks between the two countries’ private sectors, hold specialized courses, exchange trade delegations, and create a direct communication channel to follow up on agreements.

If continued, these measures can lead cooperation from the level of negotiations and memoranda of understanding toward trade contracts and specific projects.

One of the most important problems in Iran-India trade is also the restriction on money transfers and access to the international banking network. U.S. sanctions have caused many Indian companies to face greater risks in payments, insurance, and transportation when trading with Iran. As a result, part of trade is conducted through intermediary routes, which increases the cost and time of exchanges.

Transportation disruptions in the region have also intensified this problem. In recent months, part of Indian shipments, including rice, tea, and medicine, have faced delays at Indian ports, and regional developments have affected maritime transportation.

For this reason, developing alternative logistics routes and making more effective use of the region’s port and corridor capacities have become more important for Iran and India.

A notable point is that although the decline in Iran’s oil exports to India has reduced bilateral trade volume, it has on the other hand highlighted the necessity of developing non-oil exports.

Agricultural products, foodstuffs, petrochemical products, minerals, industrial products, medicine, and pharmaceutical raw materials are among the areas Iran can focus on to increase its presence in the Indian market.

India also needs goods such as foodstuffs, agricultural products, medicine, and industrial raw materials, and this very issue provides the possibility of creating a more diverse pattern for trade between the two countries.

However, increasing Iran’s exports to India will face limitations without resolving issues related to money transfers, standards, transportation, and trade tariffs.

One of the issues that can change the volume and quality of economic relations between the two countries is moving from traditional trade toward joint investment.

Cooperation between Iranian and Indian companies in medicine production, food industries, agricultural product processing, industrial raw materials, and some export-oriented projects can create more added value than mere goods trade.

In such a model, Iran can use India’s large market and industrial capacities, and India can use Iran’s geographical position to access markets in Central Asia, Afghanistan, and regional countries.

Accordingly, Iran-India economic relations under current conditions face the problem not so much of a lack of capacity as of converting capacities into sustainable trade.

India’s large market, Iran’s transit position, Chabahar Port, the North-South Corridor, BRICS capacities, and the complementarity of part of the two economies’ needs are a set of opportunities that can raise bilateral exchanges above their current level.

On the other hand, banking restrictions, sanctions, transportation costs, insurance risks, and difficulties in money transfers remain the most important obstacles to trade development.

From this perspective, the main goal in Tehran-New Delhi economic relations is not merely returning to past figures, but creating a sustainable mechanism for trade, investment, and industrial cooperation—a mechanism that can move the two countries’ trade away from its historical dependence on oil and build it on the private sector, non-oil goods, joint projects, Chabahar, and BRICS multilateral capacities.

If this path is accompanied by creating direct channels between companies and gradually resolving financial and logistical obstacles, Iran-India economic relations can move from the current limited trade toward more diverse and sustainable cooperation.

EF/MA