Indian officials say exports to Iran that could be used in the country's nuclear programme have been banned.
Iran says its nuclear programme is only for producing energy
Trade officials said the ban would prevent anything that could be used to enrich uranium from being exported directly or indirectly to Iran.
The restrictions comply with a decision taken last year by the United Nations Security Council.
The Indian government's Communist allies attacked it for voting against Iran at the UN nuclear agency, IAEA.
The Indian government's announcement was made just hours before the planned publication of a UN nuclear agency report which is expected to say Tehran has not complied with the Security Council's demands - opening the way for tougher international sanctions.
India has maintained that it's support for a resolution reporting Iran to the UN Security Council did not detract from its close relations.
Last month, Iran, Pakistan and India agreed on a pricing formula for the delivery of Iranian gas via a $7bn pipeline.
Talks on the 2,600km-long pipeline began in 1994, but have been plagued by disagreements.