From Chabahar to Kashmir: Why chaos in Iran hurts India, benefits China & Pakistan

As protests driven by economic distress and political fatigue spread across Iranian cities, New Delhi is watching events unfold with quiet unease. For India, the question is not whether Iran’s clerical leadership can weather the unrest, but what a weakened or collapsing Iranian state would mean for India’s already constrained strategic environment.India’s engagement with Iran has never been ideological. It has been shaped by geography, access and balance. With Pakistan blocking overland routes to Afghanistan and Central Asia, Iran has long functioned as India’s only viable western corridor. It has also acted as a counterweight to Pakistani influence in the region and as a stabilising pillar in India’s carefully calibrated West Asia policy, which seeks engagement across rival power blocs.A sudden weakening or collapse of the Iranian state would not produce a clean transition. It would generate uncertainty at a moment when India’s strategic room for manoeuvre is already narrowing — with Bangladesh in uncertainty with reports of minority killings, Pakistan being Pakistan, China expanding its footprint across the region and the US under Donald Trump hurtling the world into one crisis after another.

Any disruption in Iran would ripple outward, reshaping trade routes, diplomatic alignments and security calculations that India has spent decades managingBut why does Iran matter to India?India’s gateway to Central AsiaFor decades, Iran has served as India’s most viable land bridge to Afghanistan and Central Asia. With Pakistan denying India overland access, Tehran became the cornerstone of New Delhi’s westward connectivity strategy.At the heart of this vision lies Chabahar Port. Developed with Indian assistance, Chabahar was designed to give India direct access to the Iranian coast, bypassing Pakistan entirely, and linking onward to Afghanistan and Central Asia through road and rail networks.

For India, Chabahar was not merely a commercial port; it was a strategic statement — proof that geography need not be destiny.

JNU professor Rajan Kumar in conversation with the Times of India says: “Iran remains India’s most important land bridge to Central Asia, since Pakistan denies India access to overland routes.” Even after the Taliban’s return to power in Afghanistan and the stalling of rail projects due to sanctions, the logic of Chabahar has not disappeared.

If anything, it has become more critical.A regime change that leads to prolonged instability would place these projects in jeopardy. Connectivity corridors require political coherence, security guarantees and long-term planning. As Kumar warns, “In a post-Khamenei power struggle, Chabahar risks becoming a hostage to instability rather than a strategic asset.” For India, losing Iran as a stable transit partner would mean losing its only realistic access point to Central Asia.How Iran historically balanced PakistanIran’s value to India has not only been geographic; it has also been strategic. Despite being a Muslim-majority country, Tehran has never aligned itself with Pakistan’s anti-India narrative. On the contrary, Iran has consistently opposed Sunni extremist groups that threaten Shia populations — the very networks that have targeted Indian interests over the decades.This divergence mattered deeply in the 1990s and early 2000s.

As Pakistan backed the Taliban to secure “strategic depth” in Afghanistan, Iran and India found themselves on the same side, supporting anti-Taliban forces. This convergence quietly limited Pakistan’s influence in the region and prevented Islamabad from monopolising Afghanistan’s political future.If Iran weakens or splinters, that balance erodes by default. Pakistan’s influence in Afghanistan and Central Asia would grow — not necessarily through dramatic victories, but through the absence of a counterweight.

Kumar puts it starkly: “If Iran weakens or fragments internally, Pakistan stands to gain indirectly.”Iran has also been a diplomatic counterweight to Pakistan. In the mid-1990s, when Pakistan pushed for international sanctions on India over Kashmir, Tehran came to India’s aid.A weakened Iran would remove these quiet levers of influence against Pakistan. Professor Kumar warns that “India would certainly lose an important counterweight in the region if there is a regime change in Iran and a government hostile to India comes to power”. For India already facing a locked-out western corridor (due to Pakistani opposition), Tehran’s support on regional issues – even if largely rhetorical – is valuable. As Kumar notes, Iran has “never aligned itself with Pakistan’s position on Kashmir in any substantive way.” The Shia factorIran is the world’s largest Shia-majority power, and its position in West Asia gives it a distinctive role as a counterweight to Sunni-dominated states such as Saudi Arabia. A collapse of Iran’s Shia clerical system – or its replacement by a Sunni-leaning government aligned with Gulf capitals or the United States – could leave the Middle East more uniformly Sunni-oriented. For India, that shift would matter. New Delhi has carefully built relationships across religious and political divides, engaging simultaneously with Tehran, Riyadh, Abu Dhabi, Tel Aviv and Washington. This broad-based engagement has long reflected India’s non-aligned and pluralist foreign policy tradition.

A marginalised or weakened Iran would deprive India of one of its key diplomatic levers.

There is also scepticism about the assumption that regime change would automatically produce a more moderate or liberal government. As Dr Ashok Sharma cautions, “even if there is a regime change, it does not automatically mean the next dispensation will be liberal or fundamentally different”. He adds that “whether the regime is Shia or Sunni does not radically alter the strategic picture, because the internal dynamics in West Asia are far more complicated”.

From New Delhi’s perspective, the collapse of the current order could simply lead to another ideologically rigid theocracy, making outcomes harder to predict. India has often found it safer to deal with a familiar, if difficult, clerical establishment than to navigate an uncertain and potentially hostile alternative.This dilemma is sharpened by India’s deep economic and human ties with the Sunni Gulf states, where millions of Indian nationals live and work. Yet India’s diplomatic success in West Asia has rested on its non-sectarian posture. As Kumar observes, “India has quietly benefited from Iran being the principal Shia power in West Asia.” With Iran in its current role, India has been able to maintain productive relations across the region. Kumar argues that India’s strength lies in “multi-alignment”, combining close ties with the US, Israel and Gulf Arab states with a long-standing partnership with Tehran.

A more one-dimensional, Sunni-aligned Middle East would force India into uncomfortable strategic trade-offs.

There is also a security dimension. Iran has often opposed Sunni extremist groups that threaten both Shias and Indian interests.Organisations such as the Taliban and ISIS have targeted Shia communities in Iran, prompting Tehran to deploy forces like the Islamic Revolutionary Guard Corps against them.These are the same militant networks that have attacked Indian interests in Afghanistan and Pakistan. Losing Iran as a counterweight to such extremism would add to regional instability. As Prof Kumar puts it, “India has strong relations with Shia Iran as well as Sunni countries… if Iran were also to turn hostile, [that] would create serious strategic problems for India in West Asia and beyond”.Trade relations and economic stakesIn trade terms, India–Iran commerce is currently small, but not negligible.

India’s total bilateral trade with Iran was about $1.3–$1.7 billion in the past year – roughly 0.1% of India’s overall trade. The bulk of this is Indian exports of foodgrains (especially basmati rice), pharmaceuticals and agricultural goods. Conversely, India’s imports from Iran are limited – mostly dry fruits and some chemicals – and oil imports have been virtually eliminated by sanctions.

In practice, most Indo-Iran trade today qualifies as “humanitarian” (food and medicine) and is exempt from penalties.

So why does Iran matter economically? First, trade is a signal of wider connectivity. The fact that India still ranks among Iran’s top 10 sources for exports (around 8th place in 2025) indicates these linkages, however small, are hard to replace.Second, India has sunk over $1 billion into Chabahar and related projects, with committed credit lines for infrastructure. Any regime change that imperils these investments would be a direct hit on taxpayer money.

Already, India had to delay or restructure parts of the project to comply with US sanctions. Another disruption could force India to write off or renegotiate more of its contributions.The China angleIran’s tilt in favor of China is another reason India must be wary of upheaval in Tehran. In 2021, Iran and China inked a much-publicized 25-year strategic cooperation pact. Trade data reflect this pivot. In 2024–25, China was by far Iran’s largest export market, over $14.5 billion worth of Iranian goods went to China, most of it oil and gas.

In fact, as Western sanctions have bitten, Tehran has leaned heavily on Beijing to buy its discounted oil and fund infrastructure projects.If Tehran were to break with its existing regime, China could potentially reap more benefits. An Iran in chaos or a regime installed with external backing might lean even further on Beijing for security and investment. Already, Iranian officials are discussing Chinese-funded power plants and port projects in Khuzestan.

Subnational ties are growing too: President Xi has visited Iran and assured continued support.

A new Chinese-aligned government in Tehran could marginalize India’s role.Conversely, India’s presence in Iran – especially at Chabahar – is a modest counterbalance to China’s inroads. Beijing-backed Gwadar Port in Pakistan and the INSTC are part of two competing visions.

For New Delhi the loss of Tehran as an independent player only leaves more space for Chinese dominance. Professor Kumar emphasizes this point: “Given the ongoing protests, India is likely to adopt a ‘wait and watch’ policy,” he says, wary of what a US-backed or sudden regime change could mean. If a new Iranian government tilts sharply toward one side, India’s ability to engage with multiple poles (Tehran, Riyadh, Washington, even Beijing) would shrink. Thus, regime upheaval could inadvertently advantage China: a stronger Iran–China axis would give Beijing a bigger say in Iran’s regional posture, potentially to India’s detriment.Pragmatism and caution: India’s DilemmaFaced with these realities, India’s foreign policy has so far been cautious. New Delhi has refrained from overtly supporting Iranian protesters or endorsing regime change. As Prof. Kumar notes, “India would not support protest groups or any form of external intervention in Iran… Any political change, if it occurs, must be domestic.” India’s BRICS philosophy of sovereignty and non-interference is also guiding this approach.

The priority is to keep lines of communication open with Iran’s government, however challenged it may be.Dr Sharma highlights that India’s goal is continuity of engagement, not ideological victory. “Even if there is a regime change… from India’s perspective, whether the regime is Shia or Sunni does not radically alter the strategic picture,” he told the Times of India. New Delhi’s policy, he argues, will remain pragmatic: engaging Tehran while managing relations with other powers.

In practice, that means making sure that sanctions or a new government do not strangle projects like Chabahar entirely. It also means relying on India’s deep ties with the United States and the Gulf to maintain leverage.The glass-half-empty scenario for India is clear: Iranian clerical rule remains imperfect, but it is predictable and has afforded India important strategic benefits. A sudden regime change – especially one that is precipitated or exploited by foreign powers – could upend this delicate equilibrium. As Prof Kumar bluntly puts it, “Continuity in Iran’s current system has often served India’s interests better than chaos.” Iran’s current system is constraining, often frustrating, and increasingly brittle. Yet it remains a known quantity, one with which India has learned to negotiate access, balance rivals, and preserve strategic autonomy.A fractured Iran, or one pulled decisively into the orbit of a single external power, would narrow India’s diplomatic options and weaken its long-standing policy of multi-alignment. For India, a stable if frosty Tehran is less risky than an unstable or hostile one.