Indian social and women’s rights activist, educationist, Syeda Saiyidain Hameed during the Iran Embassy opens condolence book on the martyrdom of Iran’s Supreme Leader Ali Khamenei at the Embassy of the Islamic Republic of Iran, on March 5, 2026 in New Delhi, India.
Hindustan Times | Hindustan Times | Getty Images
India faces a difficult diplomatic balancing act as escalating tensions involving Iran threaten its oil supplies and test New Delhi’s traditional neutral foreign policy.
The crisis also comes as China pushes for stronger cooperation within BRICS, the bloc that includes Brazil, Russia, India, China and South Africa.
Chinese Foreign Minister Wang Yi on Sunday urged closer coordination within the group. “We must step up to the plate, and support each other’s BRICS presidency over the next two years, so as to make BRICS cooperation more substantive and bring new hope to the Global South,” Yi said in Beijing during a press conference.
India has not responded to that statement yet.
U.S. protectionism in Trump 2.0 has triggered a resumption of ties between India and China, though the realignment has occurred without much aplomb, as both countries look to avoid antagonizing U.S. President Donald Trump.
But as the Trump administration choked economic lifelines by attacking Iran, Wang’s remarks suggested Beijing sees a stronger role for BRICS cooperation.
And yet, India has maintained a stoic diplomatic position. Experts told CNBC that this tightrope walk is tied to the nation’s disproportionate economic vulnerability – arguably greater than that of China, which has months-long reserves of critical minerals and oil, compared to India’s weeks-long reserves of crude oil and far fewer reserves of gas.
It, therefore, may not come as a surprise that India is the only founding BRICS member that has not condemned the attack on Iran.
“India, notably, has taken a more pragmatic line — calling for dialogue and de-escalation rather than outright condemnation, even as Beijing appears keen to leverage the moment to question India’s diplomatic positioning within BRICS,” said Eerishika Pankaj, director at New Delhi-based think tank, the Organisation for Research on China and Asia.
She added that if India were to abandon its multi-alignment approach and take a clear side, it could risk supply volatility, pressure on the rupee, and renewed fiscal strain from energy subsidies.
India’s vulnerable position is only becoming clearer, with the government hiking liquefied petroleum gas (LPG) prices, rationing liquified natural gas (LNG), the rupee hovering around record lows and its benchmark indexes logging their worst week in over a year.
Tightening of diplomatic neutrality
Recent events have put a strain on India’s political balancing strategy and its traditional approach of non-alignment, as it appears to lean toward the U.S.-Israel coalition.
Until around 2018, Iran was among India’s top oil suppliers. The relationship was also strategically important, highlighted by New Delhi’s investment in Iran’s Chabahar Port, which gives New Delhi access to Afghanistan and Central Asia without passing through Pakistan. But U.S. sanctions in recent years have sharply reduced bilateral trade and energy flows.
Prime Minister Narendra Modi’s visit to Israel a day or so before the nation attacked Iran has led to questions of whether this visit marked tacit approval for the U.S. strike, even if the Israeli ambassador said the opportunity to attack Iran only came after the Indian leader had left Israel.
India was also notably silent when the U.S. submarine sank an Iranian warship, which was returning after taking part in military exercises hosted by India.
Shortly after the attack on the Iranian ship, Indian Foreign Minister S. Jaishankar was asked whether India was the net security provider in the Indian Ocean. He answered, “If you are asking me a serious question, I will give you a serious reply.” The moderator appeared to let it pass after an attempt to re-state the question as serious indeed.
India’s foreign secretary then, after the attack on the Iranian ship, visited the Iranian embassy in New Delhi to sign the book of condolences after the killing of Iran’s then supreme leader, Ayatollah Ali Khamenei.
Political economist Zakir Husain said such “recent developments send a signal that New India under PM Modi may have departed from the traditional policy of equi-balancing,” and that this has “created confusion among major countries in the Global South, leading them to believe that India has tilted towards Israel and the US.”
The U.S. government had previously slapped a 25% “penalty” tariff on India for buying Russian crude, though this was revoked last month.
Two days after the attack on the Iranian vessel, U.S. Treasury Secretary Scott Bessent issued a temporary 30-day waiver “allowing” Indian refiners to purchase Russian oil.
The setting for India was tricky because it was also hosting U.S. Deputy Secretary of State Chris Landau, while the agenda of firming up a trade deal derailed by the U.S. Supreme Court’s striking down of Trump’s tariffs agenda loomed large.
Some say, India’s support of the U.S. and Israel amid the Iranian crisis may be the right economic choice.
“While India has not taken any side in the war, India’s national interests definitely lie more with the US-Israel and their allies, vis-a-vis Iran… India has every right to continue its stand based on its interest, the call of the Chinese Foreign Minister notwithstanding,” said Jayant Krishna, senior fellow at the Center for Strategic and International Studies.