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Significance

The deal was one of a number of key agreements that Prime Minister Narendra Modi signed during his visit to Tehran on May 23. The visit aimed to advance relations following the lifting of sanctions on Iran in January, and a decade of missed opportunities and rising suspicion in relations between Tehran and Delhi.

Impacts

Expanding energy and trade ties will support Iran's efforts to diversify its economy and trade relationships.

Building economic ties with India will help the normalisation of Tehran's international relations.

India will limit security and defence cooperation with Iran in order to avoid alienating Israel, Gulf states and the United States.

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