US-Iran deal to help restore peace and stability in the region, says PM Modi

Prime Minister Narendra Modi today welcomed the peace deal reached between Iran and the US and said the “understanding will help restore peace and stability in the region”.

“I welcome the understanding reached between the United States and Iran on ending the conflict in West Asia, which has caused serious economic disruption across the world and led to loss of life in many countries,” he wrote on social media platform X.

The PM further hopes the remaining issues reach a sustainable final agreement. “India hopes that the implementation of this understanding will help restore peace and stability in the region and ensure the freedom of navigation and commerce. We look forward to deliberations on the remaining issues reaching a sustainable final agreement,” he added.

On Monday, Iran and the US announced that they had reached a final agreement to halt further military attacks in the region and immediately reopen the Strait of Hormuz to allow the flow of global oil via the vital checkpoint. In return, the US will lift the naval blockade at the other end of the strait and will ease the sanctions against Iran to allow it to sell oil. The US will also be releasing Iran’s frozen funds, which are worth billions of dollars.

“The Deal with the Islamic Republic of Iran is now complete. Congratulations to all! I hereby fully authorize the toll free opening of the Strait of Hormuz, and, simultaneously herewith, authorize the immediate removal of the United States Naval blockade. Ships of the World, start your engines. Let the oil flow! President DONALD J. TRUMP,” US President Donald Trump posted on Truth Social while announcing the deal. 

However, the overall understanding reached between the parties, a formal agreement has not been signed yet, and the formal signing ceremony is expected to be held in Switzerland on Friday, while all the technical details will be discussed over the next 60 days.

Industry says the deal is a positive for the Indian economy

Rajnish Gupta, Partner, Tax and Economic Policy Group, EY India, said the US–Iran agreement is unambiguously positive news for India and Asian economies more broadly. 

“On the economic front, the benefits could be significant. India imports nearly 85% of its crude oil needs, and the prolonged conflict had already pushed wholesale inflation to 9.7% in May, up sharply from 2.2% in February 2026, largely on the back of surging fuel and power costs. An easing of geopolitical tensions, combined with the reopening of key trade routes, should help correct global oil prices, ease fuel-driven inflation, reduce pressure on the fiscal deficit, and provide support to the rupee,” he said. 

According to Nirmal K Minda, President, ASSOCHAM, the peace deal is expected to bring the global economy back on track and help achieve the earlier estimated GDP growth rate.

“India, though it mitigated the West Asia war impacts to a large extent, is expected to rebound strongly to attain its trend growth rate in the current financial year 2026-27. We can expect India to clock a growth rate of 7% in FY2026-27 with dynamic and effective policy measures of the Government of India and the Reserve Bank of India in recent months,” he said.