The Bush Administration has pursued several avenues to attempt to contain or end the potential threat posed by Iran, at times pursuing limited engagement directly or through allies, and at other times leaning toward pursuing efforts to change Iran’s regime. Over the past two years, the Administration has focused primarily on blunting Iran’s nuclear program by backing diplomatic efforts by European nations and Russia to negotiate permanent curbs on it. International concerns on nuclear issues and other strategic issues have been heightened by the accession of Mahmoud Ahmadinejad, a hardliner, as president. He advocates a return to many of the original principles of the Islamic revolution as set down by the late Ayatollah Ruhollah Khomeini. Some advocate military action against Iran’s nuclear infrastructure, but others believe that continued diplomacy, combined with offers of economic rewards or threats of international sanctions is the only viable option. Still, others believe that only an outright replacement of Iran’s regime would diminish the threat posed by Iran to U.S. interests.

This report examines India-Iran relations and U.S. interests. India's growing energy needs and its relatively benign view of Iran's intentions will likely cause policy differences between New Delhi and Washington. India seeks positive ties with Iran and is unlikely to downgrade its relationship with Tehran at the behest of external powers, but it is unlikely that the two will develop a broad and deep strategic alliance. India-Iran relations are also unlikely to derail the further development of close and productive U.S.-India relations on a number of fronts.

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