Three Indian companies have joined forces with an Iranian bank for the construction of a urea plant in Iran�s southeastern port city of Chabahar.

India�s state-run Rashtriya Chemicals and Fertilizers (RCF), Gujarat Narmada Valley Fertilizers and Chemicals (GNFC) and Gujarat State Fertilizers Corporation (GSFC) have selected Bank Pasargad as the Iranian investor for the construction of Chabahar�s planned fertilizer plant, according to official IRNA news agency.

The plant, which will feed on natural gas, is expected to produce an annual volume of 1.3 million tons of urea.

The Indian companies are reportedly set to invest some 50 billion Indian rupees (USD783mn) for the project.

India�s urea consumption has soared by 50% to 30 million tons per year over the past decade. The country has to import millions of tons of urea each year to cover rising demand by its farmers for�fertilizers.

The idea to set up a joint fertilizer plant by Iran and India was broached in 2013, but talks were stalled over gas price issues.

Indian companies have already formed a tie-up with Omani companies to build a fertilizer plant in the Persian Gulf Arab nation.

Back in 2014, Iran and India signed a memorandum of understanding (MoU) to�jointly develop the Iranian port of Chabahar and both sides agreed to allow New Delhi to lease two docks at the port for�a period of�10 years - a move meant to cut India's crude oil and urea transportation costs by around 30 percent.

Iranian President Hassan Rouhani lauded New Delhi�s efforts last month, saying the development of the country�s southeastern port city will help connect India with Central Asia and also mark a new chapter in relations between the two nations.

India is relying on the prospects of establishing rail links from Chabahar to Afghanistan and thereon to Central Asia.

By Press TV