India agreed Monday, May 23 to finance the development of an Iranian port as a trading hub, as Prime Minister Narendra Modi sought to revive economic ties with Tehran after the lifting of sanctions, AFP reports.

The Indian leader met Iranian officials including President Hassan Rouhani during a visit that he said would mark "a new chapter in our strategic partnership."

Modi and Rouhani oversaw the signing of a memorandum of understanding for the provision of a line of credit from India's EXIM Bank to develop Iran's southern port of Chabahar, on the Gulf of Oman.

Rouhani hailed the project, saying it could become a "great symbol of cooperation between Iran and India," AFP says.

Modi's visit, the first by an Indian premier to Iran in 15 years, comes after international sanctions against Tehran were lifted in mid-January following an agreement with world powers over its nuclear program.

Modi and Rouhani were joined later by Afghan President Ashraf Ghani, who landed in Tehran Monday morning, to sign a three-way transit accord.

The three huddled and clasped hands gleefully like teammates after signing the accord.