Iran, US on brink of war again: For India, a lot to watch out for

The MoU had hinged on the capability Iran had demonstrated to control the Strait of Hormuz. The recent tensions hinge on the US attempting to demonstrate that it can loosen Tehran’s chokehold on the strategic international waterway, through which 20 per cent of the world’s energy supply flows.

Lessons learnt

Iran has said that that US strikes have killed at least 50 people and wounded more than 500 in the post-MoU round of hostilities. The MoU had promised major economic relief to a country crippled by sanctions. Yet, Iran’s unwillingness to back down is because of two factors — the conviction that the US cannot be trusted, and the imperative to maintain control over the Strait of Hormuz, its biggest leverage.

Thus, Iran has continued to escalate wherever it sees the need, attacking US military bases in its neighbouring countries. On July 18, the new Ayatollah, Mojtaba Khamenei, posted on X that the “repeated breaches of the agreement” show that the “signature of the US President is utterly worthless and devoid of credibility.”

Parallelly, it has refused to let go of the idea of charging some sort of transit fee and formalising its control over the Strait of Hormuz. According to the American think tank Institute for the Study of War (ISW), an Iranian Environmental Protection Agency official announced on July 18 that the body had asked the government to charge fees for “environmental services” from ships transiting the strait, citing the UN Convention on the Law of the Sea (UNCLOS).

Iran’s actions have also shown that it is adapting to US defences. It has fired high-speed, manoeuvrable missiles at US bases in the region, highlighting the threat that the advancement of Iran’s ballistic missile programme poses to US security interests, according to ISW.

The ISW said Iranian leaders focused on missile accuracy after the 12-day war in June 2025. Iran had struggled with relatively poor missile accuracy in its strikes against Israeli military targets in March and April 2026 too, which likely pushed it to deploy cluster munitions at a greater scale in order to maximise damage.

For the US, the experience has been a re-hammering of the lessons it learnt after the wars in Afghanistan and Iraq —that too much firepower, poorly applied, only produces more enemies. A major goal for the US now is to ensure Hormuz remains free for movement, like it was before it, along with Israel, attacked Iran on February 28.

Stakes for India

For Delhi, a return to open war means more lives at risk, as many Indians live and work in West Asia, apart from the large population of Indians that make up ship crews. Fourteen Indians have died since the war began on February 28, while two more are missing. New Delhi has protested with both Iranians and Americans over the loss of lives — mostly of seafarers and some Indians living and working in the Gulf.

War will also bring serious economic challenges.

The Indian economic situation is facing headwinds with the rise in energy prices, which has had a debilitating impact on its markets. The inflationary impact of West Asian developments is already visible.

In this context, New Delhi is urging both warring parties to return to dialogue and diplomacy, and not put the global economy on a slowdown in which the Global South suffers.