Iranian–Indian Economic Relations, 1997–2005: A Historical Study

Abstract

Iran shares maritime boundaries with India, which have facilitated economic interaction between the two countries for centuries. Notably, trade across the Gulf region and the Arabian Sea stretching to the Indian Ocean flourished over long periods, prompting Iran to establish Gulf-facing ports—such as the Port of Bushehr—to encourage commerce. These ports substantially contributed to the Iranian–Indian trade exchange. In addition, the Persian language has numerous shared lexical elements with Sanskrit, used in the Indian subcontinent, thereby fostering cultural communication and simplifying bilateral engagement.

After Pakistan’s independence from India in 1947, following the conclusion of British colonial rule in the Indian subcontinent, commercial, political, and cultural relations between Iran and India expanded considerably. Following the 1979 Iranian Revolution, economic ties between the two countries intensified further. Under Iranian President Mohammad Khatami, these relations witnessed a marked expansion that contributed significantly to Iran’s economic revitalization, particularly as Iran sought to stimulate its economy during this period.

The study is composed of an introduction and three main sections, followed by a conclusion. The first section provides a historical overview of Iranian–Indian relations up to 1997. The second section examines the nature of Iranian–Indian economic relations during President Mohammad Khatami’s first term (1997–2001). The third section addresses the evolution of these economic relations in Khatami’s second term (2001–2005).