PM Modi begins Iran visit; expected to sign preferential trade agreement

There will also be a pact on avoiding excessive taxation in bilateral trade, supporting mutual investments besides cultural and tourist accords.

PM Modi to visit Iran and expected to sign several economic reforms. Photo: IANS

Indian Prime Minister Narendra Modi will arrive in Iran on Sunday on a two-day official visit aimed at boosting economic ties between the two countries.

Modi is expected to sign a number of important economic documents, including a preferential trade agreement, Xinhua news agency quoted Iranian West Asian analyst Hassan Nourian, as saying on Saturday.

There will also be a pact on avoiding excessive taxation in bilateral trade, supporting mutual investments besides cultural and tourist accords.

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Modi will be accompanied by a high-ranking delegation.

Nourian felt that the most important aspect of his visit would be India`s investment in Chabahar port city and the construction of petrochemical and urea fertilizer plants in Iran.

In May 2014, India and Iran signed a MoU to jointly develop the port once the international sanctions against Iran were lifted.

Both sides agreed to allow India to lease two docks at the port for a period of 10 years, a move that was meant to cut New Delhi' crude oil and urea transportation costs by around 30 percent.

Chabahar is located in the Gulf of Oman on the border with Pakistan. The Indian move to develop Chabahar port will help New Delhi dodge Pakistan and establish a strategic connectivity to Afghanistan as well as Central Asia.

Concurrent with Modi`s visit, Afghan President Ashraf Ghani will also be in Tehran to sign a trilateral deal regarding Chabahar port.

Ghani made his first visit to Iran in March 2015 when the two countries stressed cooperation in executing bilateral and multilateral projects with regional countries, particularly India, to develop Chabahar port.

Under the agreement finalised in April, India will be allowed access to Afghanistan via the strategically located port. The Chabahar route will allow Indian goods to reach Kabul avoiding Pakistan territory.

Modi's visit would be an important marker in Iran and India`s relations, Nourian said.

On Thursday, Iran held a meeting in Chabahar with the participation of the Indian Ocean Rim Association (IORA) member states aimed at urging investment in Tehran`s development projects in the region.

Another important topic on the agenda of Modi`s visit is the return of the Indians to one of the country`s major gas fields, the Farzad B gas project and its development, Nourian said.

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