According to the agreement, Iran has committed to halt uranium enrichment beyond 5 per cent and will give greater access to inspectors. There won't be more sanctions on Iran for six months and it will receive sanctions relief worth $7 billion.
Hailing the agreement, US President Barack Obama said "Today that diplomacy opened up a new path toward a world that is more secure, a future in which we can verify that Iran's nuclear programme is peaceful and that it cannot build a nuclear weapon".
India has also welcomed the deal but it isn't going to help New Delhi in paying Iran for its oil in dollars, at least not immediately.
Sanctions affecting crude oil sales will continue to be imposed, to keep the pressure on. The US will maintain the vast bulk of its sanctions, including finance, and banking sanctions architecture. Nor is it expected to infuse energy into the dormant Iran-India pipeline dream.
Syed Akbaruddin, spokesperson of the Ministry of External Affairs, said "We can see issues in terms of the oil and gas pipeline, we will take it to the later stage because there are issues related to that, which are of longstanding nature as they deal with commercial and financial aspects".
Many Iranians feel their new president Hassan Rouhani has delivered. Replacing hardliner Mahmoud Ahmadinejad, a moderate, Rouhani insisted the deal recognised Iran's nuclear rights. It has also been backed by Iran's Supreme leader Ayatollah Ali Khamenei.
As expected, Iran's arch enemy, Israel, has called the deal a historic mistake. Israel's Prime Minister Benjamin Netanyahu is reported to have said his country reserved the right to defend itself.
The deal is being seen as a first step. Iran needs to prove the 'nuclear right' is for peaceful uses of nuclear energy, failing which it can face more isolation and pressure.