India signed a 10-year contract with Iran on Monday to develop and operate the Iranian port of Chabahar, the Narendra Modi-led government said, strengthening relations with a strategic Middle Eastern nation, Reuters reports.
India has been developing the port in Chabahar on Iran's south-eastern coast along the Gulf of Oman as a way to transport goods to Iran, Afghanistan and central Asian countries, bypassing the port of Karachi and Gwadar in its rival Pakistan, the report adds.
U.S. sanctions on Iran, however, slowed the port's development.
India's Shipping Minister Sarbananda Sonowal was in Tehran to sign the agreement.
The long-term deal was signed between Indian Ports Global Limited (IPGL) and the Port & Maritime Organisation of Iran, authorities in both countries said.
Under the agreement, IPGL will invest about $120 million while there will be an additional $250 million in financing, bringing the contract's value to $370 million, said Iranian Minister of Roads and Urban Development Mehrdad Bazrpash.
