Modi, who had a few weeks back visited Shite-nation's arch rival Saudi Arabia, is due to land here tomorrow evening and will engage with Iranian top leadership, including Supreme Leader Ayatollah Ali Khamenei, to boost bilateral trade, energy and strategic ties.
After his arrival, he will head straight to a local gurudwara where he is scheduled to address people of Indian origin.
Also, discussions would feature mode of clearance of the USD 6.4 billion Indian refiners like Essar Oil and MRPL owe to Iran in past oil dues. Ahead of the visit, refiners have cleared USD 1.2 billion.
There will be signing of two contracts -- one by Indian Ports Global Pvt, a joint venture between the Jawaharlal Nehru Port Trust and the Kandla Port Trust, with Arya Bandar Company of Iran for developing two terminals and five multi-cargo berth in Phase-1 of the Chabahar port project.
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From Chabahar port, the existing Iranian road network can link up to Zaranj in Afghanistan, about 883 km from the port. The Zaranj-Delaram road constructed by India in 2009 can give access to Afghanistan's Garland highway, setting up road access to four major cities -- Afghanistan-Herat, Kandahar, Kabul and Mazar-e-Sharif.
Indian investment in phase-1 will be in excess of USD 200 million, including USD 150 million line of credit from Exim Bank, an agreement for which would also be signed during the visit.
Sources said talks will feature Indian state-run firms securing rights to develop the offshore Farzad-B gas field, which was discovered by ONGC Videsh.
The trilateral agreement is seen to significantly enhance prospects of India's connectivity with Afghanistan, Central Asia and beyond such as the North-South corridor.
India and Iran had in 2003 agreed to develop Chabahar on
the Gulf of Oman outside the Strait of Hormuz, near Iran's border with Pakistan.
But the project moved slowly because of western sanctions against Iran. The sanctions were lifted in January and since then, India has been pushing for conclusion of an agreement.
About a fifth of the oil consumed worldwide each day passes through the Strait, a shipping choke point that separates the Persian Gulf from the Gulf of Oman and Indian Ocean.
India plans to participate in implementation of the second phase of development of Chabahar, including building a 500-km railway line between Chabahar and Zahedan that will connect Chabahar to Central Asia.
According to the provisional deal, the Indian joint venture will refurbish a 640-metre container handling facility as well as rebuild a 600-metre multi-purpose berth at Chabahar.
twenty-foot-equivalent units (TEUs) of cargo handling in the third year of operations and aims to handle 250,000 TEUs in the 10th year.
To help fund the project, the government of India had in February cleared a proposal by the Ministry of Shipping to secure up to USD 150 million in credit from the Export-Import Bank of India.
Chabahar port, located in the Sistan-Baluchistan Province on Iran's southern coast, is of great strategic utility for India. It lies outside the Persian Gulf and is easily accessed from India's western coast.
The port project will be the first overseas venture for an Indian state-owned port. Jawaharlal Nehru Port, India's biggest container port, holds a 60 per cent stake in Indian Ports Global while Kandla port has the remaining 40 per cent.