New Delhi, India - Iran and India have inked nine agreements, including leasing part of the Iranian port of Chabahar to an Indian company, after "substantive" bilateral talks between the Indian prime minister and the Iranian president in New Delhi.

"We had detailed discussions on ways to further deepen cooperation between India and Iran," Indian Prime Minister Narendra Modi tweeted on Saturday, after "fruitful" talks with President Hassan Rouhani.

Had fruitful talks with President @HassanRouhani. We had detailed discussions on ways to further deepen cooperation between India and Iran. pic.twitter.com/ocLQwCClU5 — Narendra Modi (@narendramodi) February 17, 2018

A joint statement described the Chabahar Port, which is being developed with funding from India, as a "golden gateway" that will help in reaching out to land-locked Afghanistan and central Asia.

During the joint press conference, Rouhani spoke on the importance of rail links from Chabahar to Zahedan, near the Afghan border.

Last year, New Delhi successfully sent shipments of wheat assistance to Afghanistan through Chabahar Port, bypassing archrival, Pakistan. Islamabad does not allow New Delhi to use its land route to reach Afghanistan.

"Chabahar offers India connectivity to Afghanistan and Central Asia. Along with Bandar Abbas port, it also offers India a means of multimodal connectivity all the way to Europe," said Manoj Joshi, senior analyst at Observer Research Foundation (ORF), a think-tank based in New Delhi.

"This enables India to bypass the Pakistan blockade and play a significant role in Central Asia and Afghanistan. It also helps to keep Pakistan off-balance with regard to India," Joshi told Al Jazeera.

'Belt and Road Initiative'

New Delhi has already committed $500m to the Chabahar Port, outside of the Gulf of Hormuz – site of one of the busiest shipping lanes in the world. The port is significant for India, as it would provide new sea-trading routes and connectivity to Afghanistan, aiming to parallel China's growing presence in the region.

Chabahar is located about 140km from Pakistan's Gwadar port, which is being developed with Chinese help as part of the "Belt and Road Initiative".

India's ability to forge independent bilateral relations sans overlapping interests should work here. The task before Indian diplomacy is to use its good offices and weight to promote political accommodation. Sujata Ashwarya, foreign policy expert

Hadi Haqshenas, deputy head of Iran's Ports and Maritime Organisation, said, "Chabahar's development is the most important maritime connectivity cooperation between Tehran and New Delhi.

"While, in Pakistan, the Chinese invested in the development of the Port of Gwadar; in Chabahar, part of the investment was brought by India. So these two ports, which are located at a short distance from each other, can help connectivity from India and China to Central Asia and vice-versa," Haqshenas told Al Jazeera.

On Saturday, Rouhani was accorded a ceremonial welcome at the presidential palace in New Delhi.

Both India and Iran want to see a peaceful, stable Afghanistan, Modi said at a joint press conference with Rouhani, underscoring New Delhi's focus on Kabul.

An official joint statement also referred to "strengthening India-Iran-Afghanistan trilateral consultations". The three nations had signed a trilateral transit agreement during Modi's visit to Tehran in May 2016.

Trade ties between the two countries have been dominated by Indian import of Iranian crude oil. India is the second largest buyer of Iranian crude after China.

According to India's Foreign Ministry, India-Iran bilateral trade during the fiscal year 2016-17 reached $12.89bn.

Uncertainty over the nuclear deal

Rouhani's three-day trip – the first by an Iranian president in 10 years – comes after his country witnessed one of its biggest protests in years over economic woes.

The uncertainty over the fate of the nuclear deal Tehran signed with the West in 2015 poses a big challenge to Indian foreign policy. Donald Trump, the US president, has decertified the deal that promised to lift crippling economic sanctions in return for limiting the country's controversial nuclear programme.

In a big diplomatic boost, however, Tehran was able to get New Delhi's backing on the nuclear deal, after India "reaffirmed its support for full and effective implementation" of the deal.

Speaking at an ORF event in New Delhi, the Iranian president took aim at the US, saying that haggling over the nuclear deal was "ridiculous.

"After the signing [of the Nuclear Agreement], there is no place for haggling. It is ridiculous," he said.

Experts warn that a US exit from the deal would affect India's planned investments in Iran.

"If the US pulls out, it will have many consequences. China and Russia won't accept it, and so India will have to carefully nuance its stand because it would not want to rub the US the wrong way either. It will also dampen India's ardour to invest in Iran," Joshi said.

Israel, one of the closest US allies in the region, has also been vocal against the nuclear deal, and considers the Shia government in Tehran its biggest security threat. Last week, it bombed what it called Iranian military bases inside Syria.

But Sujata Ashwarya, author of "India-Iran Relations", says India's bilateral interests in the region "serve distinct sets of interests.

"Israel is a key partner for arms import and defence technology as well as in counterterrorism initiatives," said Ashwarya, Professor at the Centre for West Asian Studies of Jamia Millia Islamia University in New Delhi.

"On the other hand, our relations with Iran, apart from being animated by the familiarity and stability of historical ties, are crucial for access to Afghanistan through the Chabahar port, and import of crude oil which is a significant seven percent and not immediately replaceable," she said.

Sectarian strife

Syria has been wracked by violence after a largely peaceful uprising against President Bashar al-Assad's regime regressed into bloody conflict, involving regional powers and a proxy war.

Iran's backing of Assad, Houthi rebels in Yemen and the armed Hezbollah group in Lebanon have heightened tension with Sunni countries in the region.

One of the biggest challenges for India is to negotiate the newly emerging faultlines in the region, said Aishwarya.

"The Sunni Arab countries of the Gulf, especially Saudi Arabia, the UAE, Bahrain and Kuwait, are aligned against Shia-majority Iran, in cohort with Israel. India has a dynamic commercial partnership with Arab Gulf states. The region is also critical to India's energy security.

"India's ability to forge independent bilateral relations sans overlapping interests should work here. The task before Indian diplomacy is to use its good offices and weight to promote political accommodation," she added.

The two leaders stressed the historic and cultural relations between the two countries.

"Relations between the two countries go beyond trade and business; they go back in history," Rouhani said.

The Iranian president began his trip from Hyderabad, the largely Muslim capital of southern Telangana State, where he met religious leaders and visited Islamic sites.

He offered Friday prayers at a 17th-century Sunni mosque in the city, and later urged Muslim solidarity and "compassion for humankind" across the world.

"They all can be compared to streams which come from a single spring and all these streams eventually into one ocean," he said, referring to sectarianism that divides the Muslim world into Shia and Sunnis - a schism linked to the battle for power, resources and territory in the Middle East.

Ties with the OPEC producer have both economic and geopolitical significance for New Delhi.

India recognises Iran as a "very major power" in the Gulf, said Meena Singhroy, Coordinator at the West Asia Centre of the Institute for Defence Studies and Analyses in New Delhi.

"Geographical proximity of Iran, its strategic location (for various connectivity projects in the region) and hydrocarbon resources make Iran an extremely significant country for India," she told Al Jazeera.

Zeenat Saberin reported from New Delhi and Saeed Jalili contributed from Tehran



