New Delhi, February 24

India approved a $150 million project to develop the strategic Iranian port of Chabahar, which includes a transit route to Afghanistan bypassing neighbouring Pakistan, a government statement said today.

New Delhi signed a multi-million-dollar memorandum of understanding with Tehran last May to develop the port on its southeastern coast, but the deal had been stuck since.

The approval came at a Cabinet meeting chaired by Prime Minister Narendra Modi.

The statement said the project would ‘provide opportunities to Indian companies to penetrate and enhance its footprint in the region’.

“Cabinet approves provision of credit of $150 million to Islamic Republic of Iran for Chabahar port development,” the statement said.

“India is negotiating this project to facilitate the growing trade and investment with Iran and other countries in the region, notably Afghanistan ...,” it added.

The port’s location will also help it compete with China, which is investing heavily in the Pakistani port of Gwadar, in the race to boost business interests in the region.