With the rising tension in the Middle East, Iran has provided a free passage to India and some of its friendly nations over the Strait of Hormuz. The March 25, 2026 declaration by the Foreign Minister Abbas Araghchi encompasses India along with China, Russia, Iraq, and Pakistan being authorized to pass by the Strait, and it obstructs ships linked to the US, Israel, and its allies. This is a calculated move that Tehran is intending to retain the allies on its side in the ongoing conflict that is one month away.
The Strait of Hormuz is a narrow waterway on the coast of the Persian Gulf and handles 1/5 to 1/4 of all the traffic of oil and LNG, which is essential to the energy-hungry Indian market, which purchases over 85 percent of its crude. The US-Israel attacks against Iran last month caused the Tehran declaration of virtual blockade in the near future, driving the Brent crude to over 90/barrel and disrupted tankers. In a television interview with the Iranian state television, Araghchi stated that the strait is not entirely shut: we allowed other friendly nations to pass through it like China, Russia, India, Iraq and Pakistan as issued by the Mumbai consulate of Iran.
It is a foreign policy triumph to New Delhi. In the first importation, Bloomberg announced that India had imported LPG under the waiver of President Trump, the first since the sanctions in 2018. In the past, the Iranian resistance to the transit charges had already opened the gate to two vessels of friendly nations by the IRGC reports, and was now considering the alternative of charging home as transit fees. Its proponents were praised by the anti-BJP leaders like Rahul Gandhi, as being a pragmatic thinker but they cautioned the people to be cautious on the matter of energy security.
At the economic level, the nod would have not only spared the Indian oil corporations, IOCL BPCL HPCL etc., the nightmare of having to reroute, and go around the Cape of Good Hope, but would also have to pay an extra 20 percent. The already high retail fuel prices could even out in case of volumes going around. In estimating FICCI, Indian exporters save about 2-3 billion a year in their logistics due to continuous access to Hormuz. Still, there exist threats: Houthi raids and Iranian checks could permit non-hostile status of vessels only, as the threats of supply shocks, announced by the UN.
Geopolitically, it elucidates the process of balancing of India as it keeps on increasing its ties with the Chabahar port and simultaneously buys discounted Russian oil. The MEA sources credited the team of PM Modi that published the victorious talk; it was the back channels that had the victory. The opponents fear that it may escalate when the opponents exceed the limits but economic gurus like Raghuram Rajan feel that this will bring more stability to the rupee considering the 650 billion forex reserves.
The BRICS buddies are slicing a lifeline through the list that is being charted out by Iran to the international markets. Will Pakistan, Iraq trail behind India in its trade? To the oil-dependent India, this greenlight in Hormuz is a drink in a very thirsty ocean–that pumps will not run dry.
