Iran on Monday said it is keeping communications open with the US as President Donald Trump weighed both military and non-military responses to the crackdown on anti-theocracy protests in Tehran. Banasree Purkayastha looks at the reasons behind the unrest, seen as one of the biggest challenges to clerical rule in Iran
What’s the current situation in Iran?
As protests against the Ayatollah Khamenei regime in Iran entered the third week, both Washington and Tehran have been issuing warnings to each other. On Monday, US President Donald Trump said Iran has proposed negotiations after his threat to strike the Islamic Republic over the killing of protesters.
Meanwhile, Iran has warned that if the US attacked it, both Israel and US military and shipping centres in the region would become legitimate target. It also tried to strike a conciliatory note by saying that “the Islamic Republic is a country that never left the negotiating table.”
The Iranian regime has been cracking down on protestors calling for an end to the theocratic regime, with reports suggesting that over 500 people have been killed and at least 10,681 arrested. Iranian Foreign Minister Abbas Araghchi, speaking to foreign diplomats in Tehran, insisted “the situation has come under total control” in remarks that blamed Israel and the US for the violence, reported Reuters.
“That’s why the demonstrations turned violent and bloody to give an excuse to the American president to intervene,” he said.
What led to the protests?
Towards the end of December 2025, protests erupted across Iran after the rial collapsed and prices of essential goods soared. By December 29, the rial had fallen to near 1.45 million to the US dollar, driving up the cost of living and pushing already severe inflation above 40–50%.
As citizens expressed frustration over rising prices, economic hardship, and long-standing grievances with government policies, it quickly escalated into calls to bring an end to the clerical rule. Anti-government demonstrators have also been raising slogans calling for the return of Crown Prince Reza Pahlavi, the son of the last Shah of Iran who was toppled in the 1979 Islamic Revolution.
The prince has sought “Trump’s help” for the Iranian people in their “fight for freedom”. The latest round of protests is seen as the strongest since that of 2002.
Collapse of the Iranian economy
Since 2018, THE US sanctions have not only limited Tehran’s ability to sell oil abroad but also restricted investment and financial transactions, increasingly isolating Iran’s economy. These measures have hit Iran’s oil exports – its main revenue source, along with its banking system, and access to international financial markets, sharply reducing foreign exchange inflows.
The prolonged contraction in economic activity, rampant inflation, and accelerated currency depreciation has led to a state of simultaneous hyperinflation and severe recession. The 12-day war with Israel in June 2025 when key energy and industrial infrastructure across Iran were hit, resulted in significant disruptions to oil exports and industrial output, further damaging its ability to rebuild its economy.
Iran’s leadership has been leaning heavily on its “resistance economy” — a strategy of self-sufficiency and closer trade with China, Russia and some regional states. As per World Bank estimates, Iran’s economy could shrink by 1.7% in 2025 and by 2.8% in 2026.
Information shutdown
The Iranian Government has imposed a nationwide shutdown of the internet, mobile phones, and landlines since January 8, which has made it difficult for international agencies to confirm the number of people dead, injured or arrested. As protestors shifted to Elon Musk’s Starlink to send out images and videos of the demonstrations and the consequent crackdowns to the outside world, the regime has used jammers to disrupt GPS signals.
A “kill switch” was activated to jam Starlink satellites, using highly expensive military-grade jamming equipment which was likely supplied by Russia or China, experts said. Starlink receivers use GPS to locate and connect to satellites. So shutdowns are localised, resulting in a patchwork of Starlink connectivity, including near blackouts in some high-tension areas.
“Despite reports that tens of thousands of Starlink units are operating inside Iran,” Iran Wire reported, “the blackout has also reached satellite connections.” It said around 30% of Starlink’s uplink and downlink traffic was disrupted initially, but that later escalated to 80%.
India-Iran relations
The Iran VS Israel and US conflict has impacted trade between New Delhi and Tehran. The US sanctions in 2018 forced India to bring its imports of Iranian oil down to zero. Despite this, in May 2024, India signed a 10-year contract to operate the strategic Iranian port of Chabahar that will help New Delhi expand trade with Central Asia.
In 2018, the US had exempted India from certain sanctions for the development of the Chabahar port given its interest in the reconstruction of Afghanistan. That exception was revoked since September 2025. Meanwhile, rice export prospects to Iran, one of the biggest destinations for basmati rice, have also dimmed with the rapid devaluation of the rial. Slowdown in shipments and payment delays continue to plague exporters.