Indian Prime Minister Narendra Modi on Monday signed a landmark agreement with Iran during a visit to the oil-rich nation.

As part of the deal, India will invest $500 million to develop the strategically located Chabahar port in Iran allowing New Delhi easy access to Afghanistan and Europe without involving Pakistan.

Experts maintain that the development of this port is going to prove important for India and will also check China's growing involvement in the region. Chabahar port is just 72 km away from the Gwadar port in Pakistan, which is part of China's $46 billion plan to develop China-Pakistan Economic Corridor and is aimed at opening new trade and transport routes across Asia.

A trilateral agreement on transport and transit corridor was also signed by India, Afghanistan and Iran. Commenting on this agreement, Modi said that it has the potential to alter the course of the history of the region.

Modi has become the first Indian prime minister to visit Iran in 15 years. He signed several deals several agreements aimed at deepening India-Iran ties in diverse fields, covered areas of economy, trade, transportation, port development, culture, science and academic cooperation.

"This major effort would boost economic growth in the region. We are committed to take steps for early implementation of the agreements signed today," Modi said. The bilateral agreements were signed after detailed discussions between Modi and President Hassan Rouhani. The two leaders also reached an agreement over setting up of an aluminium plant and laying a railway line to give India access to Afghanistan and Central Asia.

Modi also invoted Rouhani to visit India. The prime minister said that he would look forward to strengthen the engagement between the two countries and quoted a Ghalib's poetry. "Once we make up our mind, the distance between Kaashi and Kaashan is only half a step," he said.