Economic relations between Iran and India in recent years, despite having significant capacities, have faced a sharp decline in the volume of bilateral trade; a trend driven by sanctions, banking restrictions, transportation difficulties, and changes in the energy relations between the two countries. Nevertheless, the existing capacities in the fields of commodity trade, pharmaceuticals, agriculture, joint investment, and transit corridors can still provide the groundwork for the economic relations between Tehran and New Delhi to return to a development path.
Trade between Iran and India in Numbers
According to official Indian statistics, the volume of trade between the two countries in the fiscal year 2025-2026 has reached approximately $1.63 billion. Of this amount, about $1.25 billion pertains to India's exports to Iran and around $370 million relates to India's imports from Iran. This figure shows a significant gap compared to the peak period of trade relations between the two countries. The volume of trade between Iran and India in the fiscal year 2018-2019 had reached about $17 billion; a time when Iran's oil exports to India had a significant share in the exchanges between the two countries.
New Opportunities in Pharmaceuticals and Agriculture
With the reduction of oil's share in the trade between the two countries, agricultural, food, and pharmaceutical goods have gained more importance. Basmati rice is one of the most important export items from India to Iran and has accounted for a significant portion of India's exports to the Iranian market in recent years. Official Indian statistics indicate that India's basmati rice exports to Iran reached over 790,000 tons in the first 10 months of the fiscal year 2025-2026; a figure that shows an increase compared to the same period last year.
The field of pharmaceuticals and medical equipment is also one of the sectors that can help develop economic relations between the two countries. India is one of the major pharmaceutical production hubs in the world, and Iran, due to its domestic pharmaceutical industry and the need for raw materials and some specialized products, represents a significant market for Indian companies.
In this context, cooperation between the two countries in the fields of health and medical product regulation has gained attention in recent years, creating capacities for the development of pharmaceutical and industrial collaborations.
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