Modi in Iran
Prime Minister Narendra Modi in Iran for a two day visit. Pictured: Indian Prime Minister Narendra Modi (L) and Iran President Hasan Rouhani exchange ideas during a restricted tete-a-tete in Tehran on May 23. 2016.Twitter/MEAIndia

Update: 3:46 p.m. IST — Indian Prime Minister Narendra Modi and Iranian President Hassan Rouhani on Monday signed a "historic" pact to develop the Chabahar port and other related infrastructure. Modi termed the pact as an "important milestone," the Indian Express reports. 

Original story — India Prime Minister Narendra Modi met Iranian President Hassan Rouhani on Monday to build "an enduring partnership" between the two countries. Modi had arrived in Tehran on Sunday evening for a two-day visit.

The central focus of Modi's visit will be the signing of a bilateral agreement on Chabahar port in the Gulf of Oman (southern coast of Iran) with Iran. India will help Iran develop the Chabahar port.

In the first phase, India will invest about $200 million (approx Rs. 1,346 crore) to develop cargo berths and terminals, while a 500-kilometre railway line will be constructed between Chabahar and Zahedan (the capital city of Iran's Baluchestan province) in the second phase, Press Trust of India  reported.

Chabahar, which is located in South-East Iran, will allow India to bypass Pakistan when transporting goods from Central Asia by opening a new route through Afghanistan, which is a close ally of New Delhi.

Ahead of his meeting with Rouhani, Modi, in a series of tweets, said: "My meetings with President Rouhani and Hon'ble Supreme Leader of Iran will provide an opportunity to advance our strategic partnership. Enhancing connectivity, trade, investments, energy partnerships, culture and people contacts would be our priority. [sic]"

First Indian PM to visit Iran in 15 years

Modi's visit to Iran is the first bilateral visit in 15 years by an Indian prime minister. The visit comes after the international sanctions on Iran were lifted four months ago.

On Monday, Modi's Iran visit began with a trip to the Bhai Ganga Singh Sabha Gurdwara in Tehran. Modi then met Iran's President Hassan Rouhani. He will later meet Iran's supreme religious and political leader Ayatollah Khamenei.

India clears part of oil dues

Ahead of Modi's Iran visit, Indian refiners cleared part of the $6.4-billion it owed to Iran for crude oil imports through Turkey's Halkbank, Reuters quoted three sources, who were aware of the development, as saying.

Mangalore Refinery and Petrochemicals Limited paid about $500 million while India Oil Corp settled $250 million via Union Bank of India. This is India's first payment to Iran ever since sanctions were lifted in January.

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