Indian social activist, women’s rights activist, and educationist Sheda Sayyidain Hameed opens a memorial book on the martyrdom of Iran’s Supreme Leader Ali Khamenei at the Embassy of the Islamic Republic of Iran in New Delhi, India on March 5, 2026.
Hindustan Times | Hindustan Times | Getty Images
India faces a difficult diplomatic balance as rising tensions over Iran threaten its oil supplies and test New Delhi’s traditionally neutral foreign policy.
The crisis also comes as China pushes for greater cooperation within BRICS, a bloc that includes Brazil, Russia, India, China and South Africa.
Chinese Foreign Minister Wang Yi on Sunday called for closer cooperation within the group. “In order to make BRICS cooperation more substantive and bring new hope to the Global South, we must do our best as the BRICS chairmanships and support each other for the next two years,” Yi told a press conference in Beijing.
India is yet to react to this statement.
US protectionism in Trump 2.0 triggered a resumption of ties between India and China, but the realignment occurred less sensitively as both countries sought to avoid the antagonism of US President Donald Trump.
But as the Trump administration shuts down an economic lifeline with its attack on Iran, Wang’s comments suggested that Beijing sees a stronger role for BRICS cooperation.
Despite this, India maintains a calm diplomatic stance. Experts told CNBC this tightrope walk is tied to the country’s disproportionate economic vulnerability. India’s oil reserves are probably larger than China’s, which have weeks of oil reserves and gas reserves, which are much smaller, but significant mineral and oil reserves, which are many months long.
It may not be surprising, then, that India is the only founding member of BRICS not to condemn the Iranian attack.
“Despite Beijing’s seeming eagerness to use this opportunity to question India’s diplomatic position within the BRICS, India is taking a more pragmatic course, particularly calling for dialogue and détente rather than outright condemnation,” said Erythika Pankaj, director of the Institute for China and Asia Studies, a New Delhi-based think tank.
He added that if India abandons its multilateral alliance approach and takes a clear stand, it could create new risks of supply instability, rupee pressure and fiscal burden from energy subsidies.
India’s fragile position is becoming increasingly clear as the government hikes liquefied petroleum gas (LPG) prices and rations liquefied natural gas (LNG), the rupee hovers near record lows and benchmark indexes post their worst week in a year.
Strengthening diplomatic neutrality
Recent events have strained India’s political balance strategy and traditional non-alignment approach, which appears to be tilting towards the US-Israel alliance.
Until around 2018, Iran was one of India’s largest oil suppliers. The relationship is also of strategic importance, highlighted by New Delhi’s investment in Iran’s Chabahar port, which would allow New Delhi to access Afghanistan and Central Asia without going through Pakistan. However, recent US sanctions have sharply reduced bilateral trade and energy flows.
Prime Minister Narendra Modi’s visit to Israel a day or so before the Iran attack has led to questions about whether the visit signaled tacit approval of the US attack, even though the Israeli ambassador said the opportunity to attack Iran would only come after the Indian leader left Israel.
India remained particularly silent when a US submarine sank an Iranian warship returning from an Indian-sponsored military exercise.
Immediately after the attack on the Iranian ship, Indian External Affairs Minister S. Jaishankar was asked whether India was a provider of cyber security in the Indian Ocean. “If it’s a serious question, I’ll answer it seriously,” he replied. The moderator seemed to let it slip after trying to restate that the question was indeed a serious one.
Later, India’s foreign minister visited the Iranian embassy in New Delhi and signed a book of condolences following the attack on an Iranian ship and the killing of then-Iranian supreme leader Ayatollah Khamenei.
Political economist Zakir Hussain said these “recent developments signal that Prime Minister Narendra Modi’s new India may have deviated from traditional policies of balance,” adding that this has “sparked confusion among the major powers of the Global South, leading them to believe that India is leaning towards Israel and the United States.”
The US government had previously imposed a 25% “penalty” tariff on India on purchases of Russian crude oil, but this was lifted last month.
Two days after the attack on the Iranian ship, US Treasury Secretary Scott Bessent announced a 30-day temporary exemption “allowing” Indian refiners to buy Russian crude oil.
The situation was difficult to set up because India was also hosting US Deputy Secretary of State Chris Landau, while the issue of solidifying a trade deal stalled by the US Supreme Court’s rejection of President Trump’s tariff policies loomed large.
Some say it may be the right economic choice for India to support the US and Israel amid the Iran crisis.
Jayant Krishna, a senior fellow at the Center for Strategic and International Studies, said: “While India is not taking sides in the war, there is no doubt that India’s national interests lie with the US, Israel and their allies against Iran…Despite the Chinese foreign minister’s call, India has every right to continue its position based on its own interests.”
