India-US relationship is testing ties with Iran

As millions of barrels of oil flow into China through the Strait of Hormuz, India — Tehran’s longtime ally — has yet to ensure safe passage for its ships stuck in the critical waterway as New Delhi’s deepening ties with the United States and Israel strain relations with Iran.

Two Indian ships carrying liquefied petroleum gas transited the Strait of Hormuz on Friday, but this does not signify a “blanket agreement” with Tehran, Indian Foreign Minister S. Jaishankar told the Financial Times on Monday.

Jaishankar also denied claims that the safe passage of the two vessels was part of a quid pro quo deal with Iran, after New Delhi sent home about 100 Iranian naval officers on a special flight on Saturday, according to multiple media reports.

India, the world’s third-largest oil importer and second-largest consumer of liquefied petroleum gas, is grappling with rising energy costs and panic buying amid supply shortages caused by the closure of the Strait of Hormuz.

But a growing undercurrent of tensions with Tehran, combined with a growing public perception that New Delhi is tilting toward Washington, is weakening India’s ability to ensure safe passage for its energy supplies, experts said.

Over the past 80 years, since independence, India has largely followed a policy of “neutrality and engagement with all parties”. But New Delhi’s tilt towards the United States and Israel is now “obvious”, KC Singh, former Indian ambassador to the United Arab Emirates and Iran, told Inside India.

He added that a widely circulated image of Prime Minister Narendra Modi hugging Israeli Prime Minister Benjamin Netanyahu during a visit by the Indian leader to Israel last month “will stay in the Persian mind” and will likely affect India’s influence over Tehran.

During a phone call between the foreign ministers of India and Iran on Friday, Tehran asked members of the BRICS (where India holds the presidency) to condemn the US and Israeli attacks on Iran. This puts New Delhi in a difficult situation, analysts say, as it appears comfortable aligning itself with Washington and Tel Aviv.

“It is no coincidence that Prime Minister Modi addressed the Israeli parliament just three days before the US-Israeli attack on Iran and was hailed by Prime Minister Netanyahu as a ‘brother,'” Raymond E. Vickery, Jr., senior associate at global foreign policy think tank CSIS, told CNBC in an email.

India is the only founding member of BRICS that has not condemned the attack on Iran or the assassination of Iran’s Supreme Leader Ayatollah Ali Khamenei during the US-Israeli military strikes on February 28. Although India’s Foreign Secretary Vikram Misri did sign a condolence book at the Iranian embassy in India on March 5, according to local media reports.

“India has accepted the US and Israeli claim that Iran is a hotbed of radical Islamic terrorism,” added Vickery, Jr. But he noted that “India will try to salvage what it can from its relationship with Iran by calling for peace and seeking special protection for Indian shipping and nationals.”

Even amid isolated moments of cooperation, the dissonance between Tehran and New Delhi has been difficult to overlook.

On Wednesday, India co-sponsored a resolution in the UN Security Council condemning Iran’s “egregious” attacks on Gulf Cooperation Council countries and demanding an “immediate cessation of all attacks by Tehran.” Iran dismissed the resolution as “unfair and illegal,” arguing that it did not recognize US-Israeli aggression.

“I wouldn’t say India’s relations with Iran have deteriorated, but New Delhi is clearly tilting in favor of the United States, Israel and the Gulf Arab states,” Chietigj Bajpaee, senior fellow for South Asia at Chatham House, said in an email to CNBC. Bajpaee added that bilateral relations have been steadily deteriorating.

New Delhi has reduced funding for the Chabahar port project in Iran after the United States refused to extend sanctions waivers for India’s operation of the port terminal beyond April 2026, Bajpaee said. India also stopped buying Iranian crude oil after the collapse of the Iran nuclear deal under the first Trump administration.

Last week, leaders of India’s opposition parties questioned the government’s reluctance to condemn attacks on Iran, arguing that the Modi administration’s foreign policy choices are compromising India’s “energy security.”

— CNBC’s Anniek Bao contributed to this report.