The Fragile Intermission
In this edition of The Indian Radius, we examine the latest ceasefire developments in West Asia and assess what the conflict continues to mean for India.
Amphibious transport dock ship USS Somerset transiting the Strait of Hormuz (2021)
Just when the region seemed headed for a wider conflagration, Washington and Tehran stepped back from the brink. U.S., Israel, and Iran have now moved into a fragile two-week ceasefire arrangement.
Just hours before the deadline yesterday, U.S. President Donald Trump suspended the planned “total infrastructure” bombing campaign, which would likely have crippled Iran’s civilian power and transport grids indefinitely.
The suspension is strictly contingent on Iran’s “complete, immediate, and safe opening” of the Strait of Hormuz. Israel stated later that the ceasefire “does not include Lebanon.” While both the US and Iran have paused direct hostilities, Israel continues to strike targets linked to Hezbollah.
Formal negotiations between the U.S. and Iran are scheduled to begin this Friday, April 10, 2026, in Islamabad, Pakistan. Iran is entering talks using its own proposal as a framework. Key demands include:
Reopening Hormuz on Iran’s terms, with control over passage
Recognition of its uranium enrichment program
Withdrawal of U.S. combat forces from the Middle East
Compensation for damage caused by the war
Lifting of all sanctions and release of frozen assets
New Delhi’s priorities since the start of the conflict have been two-fold: protecting Indian nationals in Iran and keeping energy flows moving through the Strait of Hormuz.
Here are the latest developments in the India-Iran relationship:
The Ministry of External Affairs issued an urgent shelter-in-place advisory for all Indian nationals in Iran yesterday. Despite the ceasefire, the MEA is warning against any movement toward border crossings unless explicitly coordinated with the Embassy in Tehran, citing the risk of uncoordinated local skirmishes.
Tracking data showed that two more Indian-flagged LPG tankers had exited the Gulf, taking the total number of Indian-flagged LPG carriers that had traversed the Strait to eight. This suggests that, despite the conflict, India has had some success in keeping at least part of its maritime lifeline functioning.
After a seven-year gap, India resumed purchasing Iranian crude and LPG following a temporary lifting of US sanctions. For Iran, India is a reliable customer that has historically been willing to pursue creative payment workarounds, such as Rupee-denominated accounts. Iran is using these funds to import Indian rice, textiles, sugar, and medicines.
New Delhi is planning a $1.5 billion sovereign guarantee fund for insurers, alongside a $300 million industry pool. Maritime war-risk premiums for Gulf shipping have surged by as much as 1,000%. Even if diplomatic channels with Tehran remain open, shipping through the Gulf is operating under extreme commercial and insurance stress.
India has completed its full financial commitment of ₹400 crore ($48M approx.) for the development of the Chabahar Port in early 2026. U.S. sanctions waiver for Chabahar remains valid until the end of the month. There is a chance that Chabahar has not collapsed as a strategic project, but is operating within a narrower, more uncertain sanctions window.
Since the announcement of the ceasefire, India has received some immediate relief. The rupee strengthened, oil prices fell sharply, and Indian equities rallied. Yet the RBI kept rates unchanged, citing geopolitical tensions and oil-related uncertainty as risks to growth and inflation. So the pressure has eased, but the vulnerability remains.
India is now racing against three looming US sanctions waiver expirations:
April 11th: Russian Oil purchase waiver
April 19th: Iranian Oil purchase waiver
April 26th: Chabahar Port developmental waiver
Foreign Secretary Vikram Misri arrived in Washington, D.C. this week for a three-day visit to review the full spectrum of India–U.S. bilateral relations. India’s Ambassador to the U.S., Vinay Mohan Kwatra, also met with U.S. envoy Sergio Gor to discuss trade and security cooperation in an effort to mitigate the impact of the Hormuz blockade.
An uncomfortable feature in these developments for India has been Pakistan’s visibility as a mediator. India, however, should resist the temptation to overstate this as a diplomatic defeat and understand Pakistan’s interests in playing such a role.
First, Pakistan’s territorial proximity to Iran meant that escalation posed immediate security risks on its western border. Second, its fragile economy, already strained by inflation, fuel shocks, and reserve pressures, could ill afford a prolonged Hormuz crisis. Third, its formal mutual defence pact with Saudi Arabia meant that, had the war widened, Islamabad risked being pulled into a conflict it was far better off containing early. In that sense, Pakistan mediated not only to be a peacemaker but also to protect itself from the costs of regional collapse.
It is in India’s interest for the truce to endure. If it collapses, Pakistan’s reputational gains are likely to prove fleeting. India, therefore, should worry less about who gets credit for de-escalation and focus instead on shielding its domestic economy from further instability in the immediate term.
What We’re Reading and Listening to
[Brief] Read Anupam Manur’s latest issue brief on the Turbulence Ahead for the Indian Airline Industry
[Podcast] Tune into the latest episode of The Great Power Show, where Manoj Kewalramani has a conversation with Yaqi Li on International Relations education in China and how ideas become policy in China’s foreign affairs apparatus
[Opinion] Read Ashwin Prasad’s recent Deccan Herald piece on the Artemis Mission and the great race to the Moon
Thank you for reading this edition of the Indian Radius.
Thanks for this crisp and dispassionate analysis. Much appreciated.