India and Iran sealed nine agreements during a visit by the Iranian President to New Delhi including a key accord that leases operational control of part of the Iranian port of Chabahar to New Delhi for 18 months.

India is helping develop the port to create a strategic trade route to landlocked Afghanistan and Central Asian Republics, bypassing rival Pakistan. 

Indian Prime Minister Narendra Modi and Iranian President Hassan Rouhani also agreed to step up efforts to bring stability to war-ravaged Afghanistan after holding talks in New Delhi. 

“We both will work for restoring peace, stability, prosperity and a pluralistic system in Afghanistan,” Modi said. “We want to see our region free from terrorism.”

During his three-day visit to India, the Iranian leader, who faces the threat of reimposition of sanctions, focused on seeking Indian investments as he tries to shore up his country’s economy.

Prime Minister Modi sent out a reassuring message, saying that both countries want to intensify economic cooperation and increase connectivity and trade.

New Delhi has been a key buyer of Iranian oil and gas and maintained trade ties with Tehran even when it faced international sanctions over its nuclear program.  

Chabahar is India’s first major overseas port venture and is seen as a counter to China’s development of the Gwadar port in Pakistan. India has committed $85 million for its development and although progress has been slow, the project has taken off the ground with India shipping the first consignment of wheat to Afghanistan through Chabahar in October.

Modi called Chabahar a “golden gateway” to Afghanistan and promised to help in construction of infrastructure that will make it possible to send goods from the port onto Afghanistan, and Central Asian countries.  

“We will support the construction of the Chabahar-Zahedan rail link so that Chabahar gateway’s potential could be fully utilized,” Modi said.

Rouhani said the rail line will be an economic boon for both countries. He also said that both sides “are prepared for joint ventures in gas and petroleum sectors” and sought Indian investments in the industrial and mining sectors. 

After sanctions were lifted on Iran in 2015, India had promised to invest billions of dollars in the country in petrochemical plants, railway lines and other industries in the areas. But U.S. President Donald Trump’s warning that he could scuttle the nuclear deal with Tehran has slowed progress on investments, largely because Western banks are hesitant to do business with the country. 

According to Indian media reports, India is exploring the option of investing in Iran through its own national currency, the rupee, to bypass potential problems that may arise if sanctions are reimposed. 

Rouhani also said in New Delhi that Iran would adhere to commitments under its 2015 international agreement to limit its disputed nuclear program.

Before coming to New Delhi, the Iranian president visited the southern Indian city of Hyderabad where, during an address at a prominent mosque on Friday, he strongly criticized the Trump administration’s recognition of Jerusalem as Israel’s capital.

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