India said Monday it will invest up to $500 million in a deal to develop a strategic port in Iran and both plan a number of projects they say are worth hundreds of millions of dollars in joint projects.

The deal and plans were announced during a visit by an Indian Prime Minister Narendra Modi, the first such trip in more than a decade.

In a ceremony marking the agreements Prime Minister Narendra Modi said the bilateral agreement to develop Chabahar, in southern Iran, and the “availability of about $500 million from India for this purpose is an important milestone,” in relations between the two countries.

He also said cooperation in the oil and gas industries as key components of economic cooperation between Tehran and Delhi.

President Hassan Rouhani said working on the port can be a ``great symbol'' of cooperation between Iran and India. He said Iran's energy resources and Indian mines can pave ground for cooperation in aluminum, steel and petrochemical industries.

The two leaders will discuss the port project later with visiting Afghan President Ashraf Ghani.

Modi will also meet Iran's Supreme Leader Ayatollah Ali Khamenei.

The development of the port of Chabahar expands a trade route for the land-locked countries of central Asia that bypasses Pakistan.

The two countries also signed a number of agreements to enhance technological, petrochemical and banking cooperation.

India also began paying back $6 billion in debt from past oil purchase, last week giving Iran $750 million. It has said it will pay back the remainder of the debt.

In 2012, Iran was India's second-largest crude supplier but oil exports subsequently fell due to international sanctions over Iran's disputed nuclear program.

Tehran has been seeking to reintegrate into the global economic system following a landmark deal with world powers that lifted sanctions in return for limiting its nuclear program. (AP)