"We have agreed to consult closely and regularly on combating threats of terrorism, radicalism, drug trafficking and cyber crime," Modi said while addressing a joint press conference with Iranian President Hassan Rouhani after the two held one-on-one talks.
Besides developing the Chabahar port, the two sides also singed agreements in diverse fields like trade credit, culture, science and technology and railways.
"This major effort would boost economic growth in the region. We are committed to take steps for early implementation of the agreements signed today," he said.
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, bypassing Pakistan.
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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.
Terming the "dosti" (friendship) between India and Iran as old as history, he said "through centuries, our societies have stayed connected through art and architecture, ideas and traditions, and culture and commerce."
Iran was among the first countries to come forward in support when earthquake struck Gujarat in 2001, said Modi who was the then Chief Minister of the state.
Inviting President Rouhani to visit India, Modi said, he
would look forward to strengthen the engagement between the two countries.
In this regard he quoted a couplet from legendary poet Ghalib, "Once we make up our mind, the distance between Kaashi and Kaashan is only half a step."
Prime Minister Modi's visit to Iran comes months after lifting of international sanctions on Iran following Tehran's historic nuclear deal with the Western powers over its contentious atomic programme.
"India and Iran have always focused to add strength to our relations, even during the difficult times. In the current context, both countries can look to expand our cooperation in the fields of trade, technology, investment and infrastructure and energy security," he had told Iran's IRNA news agency.
Modi, the first Indian Prime Minister to travel to Iran in 15 years on a bilateral visit after Atal Bihari Vajpayee, arrived in Iran yesterday and offered obeisance at the Bhai Ganga Singh Sabha Gurudwara here.