Iran and India have signed a 10-year contract for operation and equipment of the southern Iranian port city of Chabahar as part of plans to further boost their bilateral trade and economic relations.

According to The Iran Project, the 10-year deal was signed by Iran's Minister of Roads and Urban Development Mehrdad Bazrpash and India's Minister of Ports, Shipping and Waterways Sarbananda Sonowal in the Iranian capital of Tehran on Monday.

The two sides agreed on the partnership of the India Ports Global Ltd (IPGL) in equipping and operation of the freight and container terminals of Shahid Beheshti Port in Chabahar.

Under the agreement, Iran's Ports and Maritime Organization (PMO) will hand over parts of the freight and container terminals of the Shahid Beheshti Port of Chabahar to India for 10 years while India invests $120 million for the supply of strategic equipment of the Port and $250 million on the transport infrastructure of Chabahar.

The parties are committed to fulfilling their obligations in facilitating transit along the International North-South Transport Corridor (INSTC), developing shipping lines between the ports of the two countries and attracting container transit freights. 

"Chabahar... can act as a focal point in the transit development of the region. We are pleased with this agreement and we have full confidence in India," Bazrpash said.

"This agreement is a start for the further development of trade between the two countries, and India's access to Afghanistan and Central Asia, Turkey, Azerbaijan and Europe through Chabahar Port will be facilitated,” he added.