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The United States emerged as a 'factor' in India-Iran relations with Bush Administration's efforts to change the global nuclear order to accommodate India's interests. In turn, India supported the US-led drive to impose sanctions on Tehran. This led to chilling of India's once warm relations with Iran. Since then, however, India has begun to chart a course more independent of Washington by showing renewed interest in Iran's energy sector and by opposing unilateral sanctions on that country. Two factors have contributed to this shift. First, the Obama administration has ignored India in a bid to woo Pakistan, seen as crucial to brokering a political settlement in Afghanistan. Secondly, the US has also failed to persuade Pakistan to take Indian concerns about terrorism emanating from its territory, more seriously. Iran and Iran's interests converge on the issue of stability in Afghanistan, which involves facilitating trade and preventing pro-Pakistan Taliban factions from becoming a part of Kabul's power structure. This also entails reining in transnational terrorism emanating from Pakistani soil, which has long affected both the countries. This paper argues that areas of convergence between Indian and Iranian interests far outweigh differences and therefore the two countries will not abandon their mutually beneficial relationship. Issues - such as energy, terrorism, and Afghanistan - crucial to both will continuously draw them together in the foreseeable future. However, the dilemma posed by continuous pulls and pressures of ties with United States will certainly overstretch India's capacity to balance its relations with Washington and Tehran. [ABSTRACT FROM AUTHOR]

With India slated to become a major economic power in the Asian region and according to RAND Corporation, could position itself in a strategic political actor in the affairs of the region, if its economy continues to sustain growth levels of 6-7 %. The economy is at around 8.5% at the moment. In this context it is imperative for India's policy makers to have a credible energy security strategy. India has been active in negotiations to build natural gas pipeline from Iran thru Pakistan to India to boost its growing energy hungry economy. Iran's geopolitics is a major concern and it is crucial for Indian policy makers to understand and analyze the political risks while dealing with Iran, which has been termed as a rogue state by the United States. This paper makes an attempt to achieve two goals:1.A study of the hardliner and reformist elements in the making of Iranian foreign policy and the central difficulty in its analysis.2.An attempt to understand the political risk analysis of Iran in the context India's vigorous pursuit of building a pipeline from that nation. ..PAT.-Unpublished Manuscript [ABSTRACT FROM AUTHOR]