Relations between India and Iran date back to the Neolithic period. The existence of several empires spanning both Persia and northern India ensured the constant migration of people between the two regions and the spread and evolution of the Indo-Iranian language groups. As a consequence, the people of Northern India and Iran share significant cultural, linguistic and ethnic characteristics.
During much of the Cold War period, relations between the Republic of India and the erstwhile Imperial State of Iran suffered due to different political interests—non-aligned India fostered strong military links with the Soviet Union while Iran enjoyed close ties with the United States. Following the 1979 revolution, relations between Iran and India strengthened momentarily. However, Iran's continued support for Pakistan (an arch-rival of India) and India's close relations with Iraq during the Iran–Iraq War impeded further development of Indo–Iranian ties. Relations between the two countries warmed in the 1990s when India collaborated with Iran to support the Afghan Northern Alliance against the Taliban.
Even though the two countries share some common strategic interests, India and Iran differ significantly on key foreign policy issues. India has expressed strong opposition against Iran's nuclear program and while both the nations continue to oppose the Taliban, India supports the presence of NATO forces in Afghanistan unlike Iran. Despite the decline in strategic and military links, the two nations continue to maintain strong cultural and economic ties. Lucknow in Uttar Pradesh, India, continues to be a major center of Shiite culture and Persian study in South Asia. Iran is the second largest supplier of crude oil to India, supplying more than 425,000 barrels of oil per day, and consequently India is one of the largest foreign investors in Iran's oil and gas industry.
In 2011, the $12 billion annual oil trade between India and Iran was halted due to extensive economic sanctions against Iran, forcing the Indian oil ministry to pay off the debt through a banking system via Turkey.
Indo-Iranian relations have been strained as of December 14, 2012, due to India's "moving towards Washington."
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“Our relations to each other are oblique and casual.”
—Ralph Waldo Emerson (18031882)