In economic, investment and trade dimensions, India has a dynamic and growing position in the international economy. With the formation of a trade cooperation agreement, especially a preferential trade agreement between Iran and India, significant non-economic, economic and trade benefits can be achieved. This study aims to provide answers to the questions of the state of bilateral trade between Iran and India, and in the past decade, have the changes in bilateral trade been due to the effect of diversion or the creation of trade? The main purpose of this article is to evaluate the development of bilateral trade between Iran and India. For this purpose, criteria such as “estimation of trade capacity” and “calculation of trade creation and diversion” for the development of bilateral trade during the period 2020-2010 have been assessed and evaluated. According to calculations, Iran’s export capacity to India is equivalent to $B21, which according to the current amount of exports, about 88.6% of this potential has not been realized. Also, 90% of these goods are intermediate and about 10% are consumer goods, which have average tariffs of 9.5% and 28.6%, respectively; It seems that the reduction of India’s tariffs within the framework of the preferential trade agreement could pave the way for an increase in Iran’s exports to India. Also, the results show that the increase in the share of bilateral trade between Iran and India was not in line with the development of Iranian trade, and the development and deepening of bilateral trade did not lead to the development of Iranian trade. The analysis of the results shows that the lack of development of bilateral trade is due to the trade structure of Iran, and at present the possibility of developing bilateral trade between Iran and India seems weak. Of course, by upgrading Iran’s economic-commercial structure, it will be possible to take advantage of bilateral trade and economic-commercial convergence.