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14 January 2026|The Hindu
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International RelationsEconomyEDITORIAL

Iran's Unrest: Economic Woes, Foreign Meddling, and Regional Implications

Iran's unrest reveals economic vulnerabilities, foreign interference, and implications for regional stability.

Background Context

The roots of Iran's economic vulnerabilities and political unrest can be traced back to the 1979 Islamic Revolution, which fundamentally altered the country's socio-political landscape. The revolution led to international isolation, particularly from the West, resulting in economic sanctions and limited access to global markets. The Iran-Iraq War (1980-1988) further devastated the economy, diverting resources from development to defense. Post-war, despite efforts at reconstruction, structural issues like dependence on oil revenues, corruption, and inefficient state-owned enterprises persisted. The Green Movement protests of 2009, triggered by disputed presidential elections, highlighted deep-seated political discontent and the government's authoritarian response, setting the stage for future unrest.

The article discusses the recent civic unrest in Iran, triggered by dire economic and political conditions, including the devaluation of the rial. The protests, which began in December 2025, saw merchants and other segments of the population joining in, leading to widespread anti-government movements. The Iranian government has responded using a four-stage playbook, involving police action, offering concessions, controlling social media, and suppressing leading protesters. Despite managing to contain the protests, the unrest has exposed systemic vulnerabilities, including the Bazaari strike and the lack of eco-political levers to address the root causes of social convulsions. The article also highlights foreign involvement, with the U.S. and Israel openly encouraging the agitators. The author argues that any conflagration in Iran would affect the security and stability of the Gulf, impact India's access to Afghanistan and Central Asia, and affect the Shia population in South Asia. The author concludes that the resuscitation of the Iranian economy would provide lucrative opportunities for India, particularly as Tehran has long pursued its version of Atmanirbharta.

Key Facts

1

Rial's devaluation: 42,000 to 1.45 million per dollar since 1979

2

Protest deaths: Over 2,000 (authorities' claim)

3

China-Iran trade: ~$40 billion

4

UAE-Iran trade: ~$30 billion

Latest Developments

In recent years, Iran's economic situation has been exacerbated by the reimposition of U.S. sanctions following the withdrawal from the Joint Comprehensive Plan of Action (JCPOA) in 2018. This has severely impacted oil exports, the primary source of revenue, leading to currency devaluation and inflation. The COVID-19 pandemic further strained the economy. Socially, there has been a growing demand for greater freedoms and economic opportunities, particularly among the youth. Looking ahead, the outcome of negotiations to revive the JCPOA will significantly influence Iran's economic trajectory. Domestically, the government faces the challenge of addressing economic grievances while maintaining political control. The rise of hardliners in Iranian politics suggests a continued emphasis on security and suppression of dissent.

Editorial Analysis

Iran's internal unrest and external pressures have significant implications for regional stability and India's foreign policy.

Main Arguments:

  1. Iran's economic woes and political repression are driving civic unrest.
  2. The government's response follows a predictable pattern of suppression and concessions.
  3. Foreign involvement, particularly from the U.S. and Israel, is exacerbating the situation.
  4. Instability in Iran could disrupt regional security and affect India's interests.
  5. Despite challenges, Iran's economy offers opportunities for India, especially in line with Atmanirbharta.

Conclusion

Iran's internal dynamics and external pressures pose challenges and opportunities for regional and international actors, including India.

2 Key Concepts to Understand

This article covers important concepts like Impact of Geopolitics on India, Impact of Economic Instability on Social Unrest. Understanding these will help you answer exam questions better.

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