In July 2009, Indian Prime Minister Manmohan Singh congratulated Iranian President Mahmoud Ahmadinejad on his June re-election, stating that “[t]here is no doubt that your continued cooperation will further enhance the bilateral ties between Iran and India in a way that will serve the two countries' national interests."
India has publicly supported Iran’s right to peaceful nuclear technology, but [now former] Indian External Affairs Minister Pranab Mukherjee has said that Iran must pursue a nuclear enrichment program “in accordance with its own international commitments and obligations, [and must] satisfy the international community that its program is indeed peaceful." Although India voted in 2005 to take the issue of Iran’s enrichment activities to the UN Security Council, it has since repeatedly insisted on a peaceful resolution to the conflict and stated it will not support any threats of violence made against Iran for its nuclear program.
On December 31, Iranian Foreign Minister Manouchehr Mottaki expressed his country’s disappointment to his Indian counterpart Somanahalli Mallaiah Krishna over India’s vote in favor of a recent resolution by the IAEA regarding Tehran’s nuclear program. In his letter, Mottaki drew a parallel between Iran’s nuclear program and India nuclear tests. Krishna, however, responded by saying that the two cases lack similarity and that India’s non-proliferation record is free from blemishes. Krishna added that New Delhi has always kept its commitment towards the International Atomic Energy Agency.
India and Saudi Arabia have together backed ongoing international efforts to resolve the controversy over Iran's nuclear program through dialogue and have requested that Tehran respond positively to efforts that could remove "doubts.” In a declaration issued after a March 2010 meeting between visiting Indian Prime Minister Manmohan Singh and Saudi King Abdullah, the two leaders called for continuation of these efforts.
In March 2010, the Indian government stressed that it now perceives additional sanctions against Iran as counterproductive. Moreover, during a visit to Washington, Indian Foreign Secretary, Nirupama Rao, announced her government’s opposition to any sanctions that would negatively affect the Iranian people, saying that "[i]t continues to be our view that sanctions that… cause difficulties to the ordinary man, woman and child would not be conducive to a resolution of this question."
Iran-India bilateral trade has increased in recent years, totaling $14 billion in 2010— a $1.4 billion increase over the previous year’s numbers. Iranian hydrocarbon exports to India constitute most of this trade. India has sought to buy oil and gas from Iran to help feed its energy needs, generated by the country’s rapid development. India’s cooperation with the United States, however, has slowed the development of relations with the Islamic Republic, particularly as the US and Iran have clashed over the latter’s nuclear enrichment activities.
The two countries have long been exploring the feasibility of the Iran-Pakistan-India Pipeline (IPI), which would provide India with a steady source of Iranian natural gas. The project has been opposed by the United States as it would provide Iran with extra revenue, undermining sanctions targeting the Iranian nuclear program. As of May 2009, India remained noncommittal due to a combination of factors, including price disputes with Pakistan, anti-Iranian pressure from the United States, security concerns, and the possibility of less expensive domestic alternatives. Consequently, that same month, Iran and Pakistan signed a deal to begin construction without India’s participation. Iranian Foreign Minister Manouchehr Mottaki has said that, in lieu of cooperation from New Delhi, China is keen to join the Pakistan-Iran project. Mottaki noted that work on the gas pipeline would begin soon and that Beijing is likely to join the project. According to a poll taken in February 2010, a majority of Pakistanis believes that the project would be more useful if China joins it.
Although India’s participation in the Iran-Pakistan-India pipeline appears in doubt, India and Iran nonetheless expanded in other endeavors, with the two entering into a new round of negotiations in July 2009 regarding the development of the Farzad B offshore gas field. According to the Iranian Mehr News Agency, a consortium of Indian oil firms intends to invest $4-5 billion in the first phase of the project, located in the Persian Gulf.
In June 2009, India’s Reliance Industries Ltc halted gasoline exports to Iran to avoid possible restriction on sales in the United States, which has increased pressure on companies selling gasoline to Iran.
A joint-venture between India’s state-owned Oil and Natural Gas Corporation and the Hinduja Group has obtained a 40% stake in Phase 12 of Iran’s South Pars gas field. The agreement for the project, which is, in total, valued at $7.5 billion, was announced in December 2009. Iran had previously assigned 60% of the project to the Indian pair, however reduced the share due to concerns over slow progress and US pressure on India.
[Click here for more information about India’s business activity with Iran.]
Although India has voted in favor of imposing UN sanctions against Iran for its nuclear program, the two countries have continued to pursue a cordial diplomatic relationship.  As two powerful countries in close proximity, India and Iran share geopolitical interests as well as commercial interests, which arise from Iran’s capacity to provide India with the energy it requires. According to Iranian President Mahmoud Ahmadinejad, Iran and India “must get prepared through strengthening bilateral ties for big changes in the world and filling the power gap in the region." Highlighting possible future avenues of cooperation, both countries are also observers of the Russia and China-dominated Shanghai Cooperation Organization (SCO).
Cooperation on security issues has largely centered on the conflict in Afghanistan and Pakistan. At a March 2009 SCO summit held in Moscow, Iran, India, and Russia discussed options to contain the Taliban in Afghanistan. In November 2009, India held discussions on the expansion of military cooperation with Iran. Improved military relations would include Indian training of Iranian troops, satellite services, and joint naval exercises in the Gulf.  Previous instances of military interaction include the training of senior judge advocates general from the Iranian Army by India’s Institute of Military Law in Kamptee since 2008.
In February 2010, Iranian Ambassador to India Seyed Mehdi Nabizadeh expressed his country’s support for India’s opposition to the concept of “good” and “bad” Taliban, dismissing recent western overtures to members of the militant organization. “Our experience is not to believe in the ‘good-and-bad’ Taliban theory. Taliban is Taliban. Extremists should not be part of any government in Kabul,” Nabisadeh said. He cautioned that the return of the Taliban would cause the regional security situation to further deteriorate and advocated a regional approach, involving India, to address the Afghan issue, saying that Tehran, like New Delhi, has a large stake in Afghanistan stability.
Indian Foreign Secretary Nirupama Rao met with Iranian leaders in the first week of February 2010 to discuss bilateral relations between the two countries. During her two-day visit to Tehran, the sides exchanged views on issues including Afghanistan, cross-border terrorism, as well as other matters of regional and global importance. Rao was in the Iranian capital for the seventh round of Foreign Office Consultations/Strategic Dialogue between the two countries at the invitation of her counterpart, Deputy Foreign Minister for Asia & Oceania Mohammad Ali Fathollahi.
During a May 2010 meeting of the G-15 developing nations, Indian External Affairs Minister SM Krishna met briefly with President Ahmadinejad for a conversation that aids described as “warm and cordial.” The two touched on the issue of security in Afghanistan and Pakistan, with the Iranian president “underlin[ing] the desirability [and] need for India and Iran to be in touch [and] work together.” In discussing Krishna’s planned visit to Tehran, Indian officials had previously stressed in March 2010 that "Iran is an important ally when it comes to dealing with Afghanistan and its help is crucial to ensure that elements hostile to India don't have a free run in Afghanistan, allowing Pakistan the strategic depth which it so dearly seeks over India."