Iran International
Fundraising drives across Indian-administered Kashmir have collected nearly $2 million for Iran following the killing of Supreme Leader Ali Khamenei, highlighting the depth of religious and ideological ties between the region’s Shia community and the Islamic Republic.
The connection runs deep enough that the region has long been nicknamed Irani Sagir (or Mini Iran.)
Across towns and villages, portraits of Khamenei appeared at donation events where residents contributed whatever they could spare: banknotes, gold jewellery and even copper utensils.
The collection drives, held in late March in cities including Budgam and Srinagar, allowed proceeds to be wired directly to the Iranian embassy in New Delhi. Iran’s embassy in India has also posted a QR code for donations on X since March 23.
In just one week, nearly ₹18 crore (about $2 million) was collected across Kashmir, excluding amounts deposited directly into the embassy’s account, according to local media reports.
One contribution seen by Iran International was ₹26 lakh (around $28,000).
The fundraising came weeks after widespread protests erupted across Kashmir following the US-Israeli airstrike that killed Khamenei on Feb. 28.
Demonstrations in Srinagar turned violent in places, leaving at least 12 people injured, including five police officers. Authorities responded with tear gas and batons, shut schools, throttled mobile internet for five days and arrested at least 50 people.
Among the outpouring of grief were calls for revenge from some protesters.“Those who oppress Muslims—we will kill them,” one unnamed demonstrator in Srinagar told Reuters on March 1.
The unrest prompted authorities to investigate several political figures accused of spreading inflammatory content online. Among them was Srinagar MP Aga Syed Ruhullah Mehdi, an influential Shia cleric with a cross-sectarian following.
“Some fools in J&K Police and administration think that by withdrawing/downgrading my security detail and suspending my Facebook account will stop me from calling out their atrocities. It is laughable,” Mehdi wrote on Facebook.
Former Srinagar mayor Junaid Azim Mattu also had his security withdrawn after condemning Khamenei’s killing on X.
Citrinowicz, Danny Citrinowicz, a fellow at the Institute for National Security Studies in Tel Aviv and former head of the Iran branch in Israeli military intelligence, warned that the donations were a possible indication that a post-Ali Khamenei Islamic Republic, likely dominated by the IRGC, would prove more operationally aggressive, not less.
"Those who think it will stay only at the level of donations are totally mistaken," he said.
For scholars of South Asian Islam, the reactions in Kashmir reflect a longstanding—though often misunderstood—connection between the region and Iran.
Justin Jones, a specialist in modern Islam in South Asia at Oxford University, said that for most Indian Shias the Islamic Republic functions primarily as a political symbol rather than a direct religious authority.
“The actual political thought of Velayat-e Faqih doesn’t cut very deep in much of India,” he said, referencing the Islamic Republic’s central doctrine of the Guardianship of the Islamic Jurist, founded by Ruhollah Khomeini after Iran’s 1979 revolution.
“It’s simply a kind of imaginary of Shia power, which has some psychological effect, but maybe not a political one.”
Kashmir, however, is different.
“Kashmir is one of the places that has been most receptive to Iranian influence,” Jones said, citing both themes of political justice that resonate with local Shia communities and ideological currents linked to Iran’s doctrine of Velayat-e Faqih.
“Iran is perceived as the representative of the Muslim world,” human rights activist Javed Beigh told Iran International.
“There was no other Muslim leader perceived as strongly against the United States and its allies as Seyyed Ali Khamenei,” said Beigh, who is a Shia Muslim based in Budgam.
That perception, he added, has also resonated with some Sunni Muslims across the subcontinent, particularly amid Israel’s war in Gaza.
A Kashmiri law student who asked not to be identified described two different responses among younger Shias.
One group, he said, views the Islamic Republic as a political system that must survive — and would find its collapse “almost existentially shattering”. The other sees Iran’s 1979 revolution as a historical process that may endure even if the current regime falls.
“They think of it as something in evolution,” he said. “It might fail temporarily, but they have a strong belief in the possible resurgence and resurrection of the system in the future.”
Simon Wolfgang Fuchs, an associate professor at the Hebrew University of Jerusalem who studies Shia Islam in South Asia and the Middle East, said the Islamic Republic’s influence in the region extends beyond politics.
“For them, Iran is very much a religious landscape—an enchanted place where you have a Shia-run state,” he said.
“The symbolic capital of Iran has not weakened… for South Asian Shia, Iran has been perceived as someone who stands by them and protects them.”
That connection has deepened as Iranian-trained clerics return to South Asia and pilgrims travel through Iran to reach holy sites in Iraq, experiencing the country as part of a broader sacred geography.
The Kashmiri student said many Shias in the region view that geography, stretching from Iran to Iraq, as central to the future of Shia political movements.
“Iran and Iraq are seen to inhabit the symbols of the sacred geography of the Shiite tradition,” he said. “If such a movement is going to be reborn, it must be around that geography—not outside it.”
He estimated that roughly 60 to 70 percent of Kashmiri Shias hold that view: that any future resurgence of the ideology would belong in the Middle East rather than South Asia.
Those ties are reinforced by institutions that operate independently of Tehran.
The Imam Khomeini Memorial Trust, an Iranian-linked organisation active in Kashmir, trains local clerics and funds religious education, according to research by the Middle East Forum.
Al-Mustafa International University, headquartered in Qom and funded directly by Iran’s Supreme Leader, operates affiliated seminaries across India and Pakistan whose graduates return to run religious institutions, according to research by United Against Nuclear Iran.
“Many people, even from my village, are still in Iran — living there, doing business, studying,” Beigh said. “That’s how you actually develop a strong bond between two communities.”
For some security analysts, however, those connections raise concerns about political radicalisation.
Sajid Yousuf Shah, a political analyst in Jammu and Kashmir with India's ruling Hindu nationalist BJP party, said ideological loyalty to the Islamic Republic runs deep within the region’s Shia community.
“They don’t want modernisation. They don’t want westernisation. They don’t want any regime change in Iran,” he said, arguing that many supporters hope for the Islamic Republic’s survival rather than its replication elsewhere.
Abhinav Pandya, CEO of the Usanas Foundation, a geopolitical think tank in India, said Tehran’s ideological outreach has fostered what he described as “extraterritorial loyalties”.
“Increasingly, the Shia Muslims in India have come under the influence of the Iranian regime,” he said. “That is very problematic.”
Pandya also pointed to contacts between Iran-aligned militant groups such as Hamas and Hezbollah and anti-India militant networks in the region, citing Indian media reports linking such groups to militant activity in Kashmir.
It was a similar concern voiced by Citrinowicz, who said Iran’s student and religious networks in India could potentially serve as recruitment channels.
“The platform they are able to build—through control of religious centres, through academia, through social media—has transformed these places into fertile ground for recruitment,” he said.
Citrinowicz points to the Islamic Republic’s history of retaliating globally following the killing of its senior figures, with plots disrupted across Africa, Europe and Asia after the assassinations of Qasem Soleimani and Mohsen Fakhrizadeh in 2020.
"Nobody should be surprised if you'll see in the next couple of weeks or months (Iran) again tries to do something against India.”
Indian officials familiar with the issue, however, say such fears may be overstated.
A former official at India’s National Security Council Secretariat said the solidarity expressed after Khamenei’s killing reflected religious sentiment more than political mobilisation.
“The reverence is more on the religious side than on a struggle side,” he said, describing the protests as a form of collective mourning typical of Shia communities.
While authorities were monitoring the donation drives, he said they did not consider them significant enough to warrant intervention. The donations themselves also reveal a more complex picture.
Local media reported that some Hindu donors sympathetic to Iran’s historical ties with the subcontinent also contributed to the fundraising drive.
Fabrizio Speziale, a Professor of Indo-Persian history at the School for Advanced Studies in the Social Sciences in Paris, said the cultural connections between Iran and South Asia have long crossed religious boundaries.
Persian culture historically served as a shared intellectual language across the region, linking Sunni, Shia, Hindu and even European scholars.
That legacy, he said, differs significantly from the modern political ideology of Velayat-e Faqih.
For Beigh, however, the bond between Kashmir’s Shia community and Iran transcends politics. “We have more than 90 percent of things we do in our daily lives similar to what you do in Iran,” he said.
Even if the Islamic Republic were to collapse, he believes the connection would endure. “They will have to embrace any change in Iran,” he said. “But the bond will remain.”
Fatemeh Mohajerani, the spokesperson for the Iranian government, said on Tuesday losses from the US-Israeli military campaign are estimated at around $270 billion.
The New York Times, citing three Iranian officials and two economists, reported that early estimates broadly align with that figure, placing the damage at roughly $300 billion or higher.
Preliminary estimates by the US-based think tank Foundation for Defense of Democracies also suggest Iran absorbed roughly $150–$300 billion in economic damage.
Using a population of about 92 million, the lower estimate of $150 billion translates to roughly $1,600 per person, rising to nearly $3,250 per person under the higher estimate.
These figures reflect national wealth lost through destruction, halted production and disrupted trade.
Iran’s central bank has warned President Masoud Pezeshkian that rebuilding the country’s war-damaged economy could take more than a decade, sources familiar with internal deliberations told Iran International.
In a stark assessment delivered to the president in recent days, senior economic officials said the damage inflicted during the 40-day war with the United States and Israel—combined with Iran’s already fragile economic situation—could take up to 12 years to repair.
Industrial sectors bear largest losses
Petrochemicals account for the largest share of damage. Iran’s petrochemical sector, with annual sales of $29.1 billion, has seen about 85% of export capacity disrupted following strikes on major hubs including Mahshahr and South Pars. Estimated losses range from $30 billion to $50 billion.
Energy infrastructure has also been heavily affected. Refineries, storage depots and gas facilities have been struck, weakening a sector that generated about $78 billion in exports in 2024. Losses are estimated at $15 billion to $25 billion.
Steel production, which underpins both industrial output and reconstruction, has been severely reduced, with about 70% of capacity disrupted. Losses are estimated at $5 billion to $10 billion.
Beyond physical losses, the war has triggered a sharp contraction in output.
Experts estimated a decline of more than 10% in GDP, equivalent to $34 billion to $44 billion in lost economic activity, affecting an economy that was already under strain before the conflict.
Beyond physical damage, policy-driven disruptions have compounded the losses.
Internet shutdown
A nationwide internet blackout beginning Feb. 28 has imposed additional costs.
Direct losses are estimated at $37 million to $42 million per day, totaling $1.5 billion to $2.5 billion over more than five weeks.
Afshin Kolahi, a member of Iran’s Chamber of Commerce, said Monday indirect losses could raise the daily figure to $70 million to $80 million due to disruption to online businesses.
Online sales fell by about 80% during the shutdown, while the Tehran Stock Exchange lost 450,000 points within four days.
The shutdown is affecting multiple layers of the economy simultaneously, according to economic analyst Masoumeh Taherkhani.
“The Iranian economy is damaged at three levels by internet disruption, starting with the digital core, which employs between four and five million people,” Taherkhani told Iran International. “Then the platform layer collapses, and finally the broader economy is affected in a way that spreads across production and services.”
Taherkhani said the combined effect leads to widespread job losses. “When the economy is fully stagnant, the outcome is unemployment for workers, and that is not something that can easily be reversed,” she said.
Trade disruption and self-inflicted losses
Disruptions linked to the Strait of Hormuz have added further pressure, with estimated losses of $5 billion to $15 billion.
The restrictions have affected imports of essential goods and weakened non-oil exports, contributing to supply chain disruptions across the economy.
A US naval blockade targeting Iran’s maritime trade routes is expected to deepen losses.
Sanctions strategist and former US Treasury official Miad Maleki estimated that cutting off seaborne trade could eliminate about $435 million in daily economic activity, equivalent to roughly $13 billion per month.
Iran relies on the Persian Gulf for more than 90% of its trade, leaving it highly exposed to sustained disruption.
Oil exports of about 1.5 million barrels per day – generating roughly $139 million daily – could be halted almost entirely, removing the country’s main source of foreign currency.
What the losses could have funded
The scale of damage corresponds to investment levels that could have reshaped core sectors of the economy.
A large combined-cycle power plant with capacity of around 1,000 to 1,500 megawatts typically costs between $600 million and $1 billion to build, depending on technology and fuel infrastructure.
At the lower estimate of $150 billion in losses, Iran could have financed roughly 150 to 250 such plants. At the upper estimate of $300 billion, that rises to between 300 and 500 plants, enough to eliminate electricity shortages and significantly expand export capacity.
In housing, average construction costs for a modest apartment unit range between $30,000 and $50,000. With $150 billion, between 3 million and 5 million housing units could have been built. At $300 billion, that increases to roughly 6 million to 10 million units, enough to address shortages across major urban areas.
High-speed rail construction typically costs between $20 million and $40 million per kilometer. The lower estimate of losses could have funded approximately 3,750 to 7,500 kilometers of rail, while the higher estimate could support up to 15,000 kilometers, connecting major cities nationwide.
A modern hospital costs between $200 million and $500 million to construct and equip. The lower-end losses could have built 300 to 750 hospitals, while the higher estimate could fund up to 1,500 facilities, expanding healthcare access across the country.
What it means for individual Iranians
The per capita loss of up to $3,250 represents a substantial share of annual income for many households.
With average monthly earnings between $150 and $200, an individual earns roughly $1,800 to $2,400 per year, meaning a $3,250 equivalent exceeds a full year of income for many citizens.
If such an amount were available, it could cover between 12 and 20 months of living expenses for an average worker. Families could use it toward housing costs, including down payments or completing home purchases in smaller cities.
Small businesses could be launched with startup capital of $2,000 to $5,000, enabling self-employment in sectors such as retail, services or online commerce. Households could also afford private healthcare, education or relocation costs that are otherwise beyond reach.
Even the lower estimate per person represents several months of income, providing a buffer against inflation, job loss or unexpected expenses.
The overall range reflects damage already incurred, with additional losses building as trade, production and financial flows remain disrupted.
At up to $3,250 per person and rising, the economic toll underscores the scale of damage to Iran’s productive capacity, with long-term implications for recovery and growth.
