The Asian policy of the Islamic Republic of Iran has attracted the attention of many researchers in recent years as a fundamental part of the country's foreign policy. However, most of the related research on this subject has focused more on Iran's relations with China and Russia as two eastern powers, and the issue of Iran's failure to develop its interactions with other environments, including the Indian subcontinent, has rarely been considered. Given the special position of the Indian subcontinent in the "Asian" environment, the central question of the present study is which limiting variables affect the advancement of the Islamic Republic of Iran's Asian policy in the Indian subcontinent environment? The hypothesis that is tested in the course of the research is that in order to evaluate the limiting variables of Iran's Asian policy in the Indian subcontinent environment, attention should be paid to two levels of limiting variables, based on neoclassical realists. At the first level, there are structural elements of the international system such as the Iran-US rivalry and emerging regional dynamics that have limited the overall framework of the country's foreign policy choices in this environment. At the second level, there are non-structural elements such as an inaccurate perception of existing equations, an overestimation of the maneuvering power among Asian actors, and a low capacity of bureaucratic mechanisms that prevent the optimization of achievements in this limited environment of choices. In this study, a qualitative research method, an analytical-descriptive approach, and library resources have been utilized.
Keywords: Asian Policy, Islamic Republic of Iran, Look East Policy, Indian Subcontinent. Balanced Diplomacy, Neighborhood Policy
 
Extended Abstract
Iran’s “Asian Policy” is to be considered an evolution of a former policy approach widely known as the “Look East Policy”. Initially seen as a strategic counterbalance to Euro-American influence, this approach aimed to strengthen Iran’s ties with non-Western powers, especially China and Russia. However, when these countries backed UN sanctions against Iran, the strategy lost traction. In later years, Tehran explored alternative alignments, including South–South cooperation with Latin American and African countries.(Bagheri Dolatabadi & Shafiee Seifabadi, 2021) The 2010s brought a more nuanced understanding: Iran’s eastward focus was no longer just about confronting the West but also about capitalizing on the growing influence of Asia in the international system. Particularly, after the adoption of JCPOA and initial détente with U.S., Iran’s “Look East Policy” was translated as a balanced approach to engage and exploit evolving relations with Asian powers in economic, political, and security domains.  While most attention in Iranian scholarly studies has focused on the role and position of China and Russia in Iran’s “Look East Policy” and “Asian Policy”, other significant Asian regions—particularly the Indian subcontinent—remain underexplored. 
Research Question
Acknowledging the fact that Iran’s “Asian Policy” has fallen short in the Indian subcontinent in comparison to China and Russia, this article addresses the existing gap in the literature by asking: What are the main constraints that have prevented Iran from effectively implementation of its Asian Policy agenda in the Indian subcontinent?
Research Hypothesis
Drawing on the analytical lens of neoclassical realism, the study examines this hypothesis: Iran’s initiatives in the Indian subcontinentin its “Asian Policy” has been plagued not only by the structural constraints, but also by internal constraints that prevent the maximal performance of the policy in the given structural environment.
Theoretical Framework
The article employs neoclassical realism to assess Iran’s underperforming foreign policy agenda in the Indian subcontinent. Unlike structural realism, which focuses exclusively on international system constraints, neoclassical realism introduces domestic-level variables—particularly elite perceptions and state capacity—as mediators between systemic pressures and foreign policy outcomes. As theorized by Gideon Rose, states albeit face structural constraints, but their ability to respond depends on how national elites interpret those conditions and whether state institutions can mobilize resources effectively. Therefore, the same structural environment may lead to different outcomes depending on internal decision-making dynamics.(Rose, 1998)
 
Iran’s Initiatives in the Indian Subcontinent
Iran’s “Asia Policy” initiatives in the Indian subcontinent mostly include four main areas. First area would be trade and energy in which despite historical ties, trade volumes with India, Pakistan, Bangladesh and Sri Lanka remained stagnant. Importantly, Iran’s oil exports—once a cornerstone of economic ties—have ceased completely since the imposition of U.S. secondary sanctions during first Trump administration’s “Maximum Pressure” campaign.
Second, are the Large-Scale Economic Projects namely “The Peace Pipeline” with India and Pakistan, “Farzad-B gas field” cooperation with India, “Uma Oya Hydroelectric Project” in Sri Lanka and “Electricity Export Line” to Pakistan. Most of these large-scale projects have faced delays or cancellations due to sanctions and financial constraints. Third area of cooperation would be Connectivity Projects and Corridors like the International North–South Transport Corridor (INSTC) initiative and the development of Chabahar Port with India, and the ITI railway project with Pakistan. These connectivity projects have shown much higher strategic potential despite western sanctions, yet still they suffered from execution delays, funding gaps, and legal disputes. Last area of cooperation would be Security and Multilateral Engagements. Iran had minimal military engagement with India, Pakistan and the others, and the security cooperation was inconsistent. Particularly in relations with Pakistan, Iran has faced complicated border insecurities such as terrorism and smuggling, which from time to time has led to minimal confrontations between Iran and Pakistan. At last, Iran is a joint member in forums like SCO and BRICS with these South Asian nations which offers diplomatic potentials but so far has had few tangible outcomes.
Major Constraints of Iran’s Asian Policy in the Indian Subcontinent
The foremost external constraint is the persistent antagonism between Iran and the United States. Through secondary sanctions and dollar hegemony, Washington has effectively deterred the countries of the Indian subcontinent from meaningful economic engagement with Iran. Even where cooperation is beneficial—such as India importing Iranian oil—U.S. pressure prevails. In other words, Iran is unable to use its relative national power and resources in its relationship with the above-mentioned nations due to U.S. hegemony in global financial system. This factor has been powerful enough to stop the smaller countries -Sri Lanka and Bangladesh- from any meaningful economic interaction with Iran. Additionally, the rising U.S.–China rivalry has reshaped the regional dynamics in Asia. India aligns more closely with the U.S., while Pakistan deepens ties with China. In another level, India aligns with Israel and U.A.E (named Indo-Abrahamic Alliance) in order to contain both Iran and China, while substituting U.S. direct presence in West Asia.(Mozaffari Falarti, Shahsharghi, & Meraji, 2025) In such structural circumstances, Iran’s India-centric initiatives seem less viable, while resulting in a strategic ambiguity toward the existing great power rivalries. 
In fact, much of this ambiguity is the practical outcome of what the Neoclassical realists would call the intervening variables. It seems that Iranian elite suffers from misperceptions and miscalculations with regard to great power rivalries and the regional dynamics. Considering Iran’s major antagonism with Washington, it seems that the overemphasized neutrality between Beijing, Delhi and Islamabad does not maximize Iran’s policy outcomes. India’s inclusion in Chabahar Port for example, was highly in line with U.S. containment policy against China in Afghanistan and Central Asia, while Iran viewed it as a balanced move to include India in its political toolkit.(Haji Yousefi & Naroee, 2021) Yet it seems that Iran’s elite perception of its ability to maneuvers between different Asian powers was relatively overestimated. In other words, Iran have received marginal benefits from India’s presence in Chabahar, while China and Pakistan have developed major concern from that presence. Building upon another notion in the Neoclassical Realist approach, it is to be noted that Iran’s marginal benefit from India’s presence in Chabahar was not necessarily an outcome of the structural constraints, but an indirect outcome of the bureaucratic weakness and underperformance in mobilization of resources. Since the port was exempt from U.S. sanctions for years, yet the finalization of the long-time contract took years, due to a single legal clause disagreement.(Shukla, 2024) Delayed for more than a decade, the stalled railway development of Chabahar is yet another case of institutional underperformance. Also, in the case of Pakistan’s electricity export contract, the fact that Iran does not have failed to develop a stable excess capacity in summer peak, is yet another example. (Otaghe Iran Online, 2023)
Conclusion
Iran’s Asian Policy in the Indian subcontinent has underperformed relative to its ambitions and strategic potential. While U.S. sanctions and emerging dynamics represent significant external constraints, Iran’s internal constraints—including misperceptions, overestimation of relative power and ability, and bureaucratic dysfunction—have played an equally critical role in its limited success. Regardless of the outlook that exist in removal of the structural factors, mostly sanctions, Iran must recalibrate its expectations, improve its internal policy capacity, and align its initiatives more realistically with regional dynamics. Without such reforms, Tehran would not succeed in its “Asian Policy”’ objectives in the Indian subcontinent.