Why in the News

Iran has witnessed its third major wave of protests in three years, triggered by a rapidly depreciating currency and a sharp rise in the cost of living. The Iranian rial crossed 14.8 lakh rials per dollar in January 2026, reflecting severe macroeconomic stress. Unlike earlier protests, the current unrest increasingly targets regime legitimacy rather than isolated economic grievances, marking a qualitative shift in public anger.

Introduction

Iran is experiencing a convergence of economic collapse, political fatigue, and institutional rigidity. While inflation and currency depreciation act as immediate triggers, the protests reflect deep-rooted dissatisfaction with governance structures, the exclusionary political system, and the shrinking space for reform within the Islamic Republic.

Is the current unrest primarily economic in nature?

1. Currency depreciation: The Iranian rial has lost value rapidly, falling from 8.17 lakh per dollar in January 2025 to 14.8 lakh by January 2026, indicating macroeconomic instability.
2. Inflationary pressures: Inflation crossed 30% in 2025, while food inflation exceeded 52%, eroding real incomes.
3. Purchasing power collapse: Rising import costs and sanctions-driven shortages have reduced household consumption capacity.
4. Recurring pattern: Similar economic triggers were visible in protests of 2017-18, 2019, and 2022, indicating unresolved structural weaknesses.

Why do these protests extend beyond economic grievances?

1. Regime-directed anger: Protest slogans increasingly target the Islamic Republic itself, not just economic managers.
2. Legitimacy deficit: Long-standing political exclusion and weak accountability mechanisms have amplified discontent.
3. Historical continuity: Economic hardship has consistently acted as a vehicle for political dissent over the past two decades.
4. Symbolic rupture: Public defiance now challenges the foundational narrative of revolutionary governance.

How has Iran’s political structure constrained internal reform?

1. Clerical dominance: The Islamic Republic’s institutional design concentrates power within unelected clerical bodies.
2. IRGC entrenchment: The Islamic Revolutionary Guard Corps controls large segments of the economy and security apparatus.
3. Electoral erosion: Disqualification of reformist candidates has weakened the representative character of elections.
4. Policy rigidity: Governance prioritises regime survival over economic rationalisation.

Why is this moment particularly vulnerable for the regime?

1. Leadership uncertainty: Supreme Leader Ali Khamenei’s advanced age raises succession concerns.
2. Factional paralysis: Internal elite divisions limit coordinated economic or political responses.
3. Social exhaustion: Repeated protest cycles have normalised public confrontation with authority.
4. Youth alienation: A demographically young population faces unemployment and restricted mobility.

How have external pressures compounded Iran’s internal crisis?

1. Sanctions impact: US-led sanctions continue to restrict oil revenues, banking access, and trade.
2. Geopolitical isolation: Iran’s global standing remains constrained despite regional influence.
3. Security prioritisation: External threats have reinforced a militarised governance approach, reducing focus on civilian welfare.
4. Limited diplomatic relief: No durable sanctions relief has materialised to stabilise the economy.

Conclusion

Iran’s current unrest reflects a structural crisis of governance rather than a cyclical economic downturn. Inflation and currency collapse act as triggers, but the persistence of protests signals a deeper crisis of political legitimacy, one that economic management alone cannot resolve without systemic political reform. 

PYQ Relevance

[UPSC 2018] In what ways would the ongoing U.S-Iran Nuclear Pact Controversy affect the national interest of India? How should India respond to this situation?

Linkage: UPSC frequently frames questions on major geopolitical flashpoints such as the U.S.-Iran nuclear issue, as they have direct implications for India’s foreign policy, energy security, and strategic autonomy. The article highlights how prolonged sanctions and nuclear-related tensions have translated into economic distress and internal instability in Iran.

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