What Happened
- Iran introduced legislation in early April 2026 formally imposing tolls on vessels transiting the Strait of Hormuz, while still permitting passage to ships from "friendly" nations after coordination with Iranian authorities.
- Iran has been collecting informal fees — in yuan and cryptocurrency — from some vessels since late March 2026, with China, Malaysia, Egypt, South Korea, and India among nations whose ships have been allowed passage.
- India's Ministry of External Affairs reiterated that Indian vessels are not paying any fees or protection money, and that passage has been facilitated through diplomatic engagement.
- India maintained its longstanding position that the Strait of Hormuz must remain open for free, safe, and unimpeded navigation in line with international maritime law.
- The United States indicated it seeks the Strait open "without limitation, including tolls" as part of any ceasefire arrangement, reflecting global stakes in the waterway's status.
Static Topic Bridges
Freedom of Navigation and Transit Passage Under UNCLOS
The United Nations Convention on the Law of the Sea (UNCLOS), particularly Part III (Articles 37–44), governs "Straits used for international navigation." Article 38 grants all ships and aircraft a right of transit passage that "shall not be impeded," and Article 44 explicitly prohibits the suspension of transit passage under any circumstances. Transit passage is considered a stronger right than the older "innocent passage" regime — it applies equally to surface vessels, submarines in submerged mode, and aircraft overflight.
- UNCLOS Part III, Articles 37–44 — transit passage through international straits
- Transit passage is non-suspendable; cannot be conditioned on payment of tolls
- Iran has not ratified UNCLOS, but the transit passage regime is widely regarded as customary international law binding on all states
- The Strait of Hormuz at its narrowest is approximately 33–39 km wide, falling within Iran and Oman's territorial waters
Connection to this news: India's insistence on "free, safe" navigation is grounded in these customary international law norms. By publicly rejecting a toll regime, India signals alignment with the rules-based international order while protecting its energy supply lines diplomatically.
India's Energy Security and the Hormuz Chokepoint
The Strait of Hormuz is the world's most critical oil chokepoint, with roughly 20–21 million barrels of oil per day passing through it — approximately 20% of global petroleum liquids. India imports over 85% of its crude oil, and a significant share originates from Gulf producers (Saudi Arabia, Iraq, UAE, Kuwait) whose export route passes through the Strait. Any disruption or cost imposition directly increases India's energy import bill and affects domestic inflation.
- India's crude oil import dependence: over 85% of consumption
- Top suppliers — Saudi Arabia, Iraq, UAE, Kuwait — all route exports through Hormuz
- India's oil import bill was approximately $132 billion in 2023-24
- A closure or toll regime could trigger global oil price spikes affecting India's current account deficit
Connection to this news: India's diplomatic posture — firm on the principle while avoiding confrontation — reflects the balance between energy realism and rule-of-law advocacy. India cannot afford Hormuz disruption and therefore engages Iran diplomatically while publicly upholding free navigation norms.
India's Foreign Policy Doctrine: Strategic Autonomy
India practises "strategic autonomy" — maintaining independent relationships across geopolitical blocs and refusing to join any single alliance that constrains policy options. In the Hormuz context, India has ties with Iran (Chabahar port, historical relations), with Gulf Arab states (large diaspora, oil imports), and with Western partners. India navigates this by engaging Iran bilaterally while affirming multilateral norms, without endorsing military action or economic sanctions that could jeopardise energy access.
- Chabahar Port Agreement (2016, extended 2024) — India's strategic investment in Iran's Sistan-Baluchestan province
- India–Iran bilateral trade continues within humanitarian and permitted channels despite US sanctions
- India abstained on multiple UN resolutions condemning Iran during 2025–26 tensions
Connection to this news: India's nuanced stance — asserting free navigation without confronting Iran — is a textbook application of strategic autonomy: protecting core interests while preserving diplomatic flexibility across competing partners.
Key Facts & Data
- The Strait of Hormuz connects the Persian Gulf to the Gulf of Oman; at its narrowest it is approximately 33–39 km wide
- Approximately 20% of global petroleum liquids and 17% of global LNG transit Hormuz annually
- India imports over 85% of its crude oil; Gulf states account for roughly 60% of Indian crude imports
- UNCLOS Articles 37–44 codify non-suspendable transit passage rights through international straits
- Iran is not a party to UNCLOS; however, the transit passage regime is considered customary international law
- India's Chabahar Port investment provides an alternative connectivity route bypassing Pakistan — a separate but related strategic interest in maintaining productive Iran ties