With India and Iran taking a major step in boosting connectivity with the Chabahar port agreement, industry chamber Ficci said on Tuesday that this will reduce the transportation cost significantly and help Indian companies boost their engagement in Central Asia.
"Prime Minister Narendra Modi's outreach to Tehran has infused vigour into the momentum to develop connectivity, infrastructure and in India's energy security goals, " the Federation of Indian Chambers of Commerce and Industry said in a statement here.
"The signing of commercial contract for the Chabahar Phase 1 will open a route to land - locked Afghanistan and cut transport costs/time by third.
"It will help Indian companies enhance engagement in Iran and gain access to Afghanistan and Central Asia.
In the long run Chahabar will also serve as the point of origin for the proposed Iran - Oman - India pipeline, " it added.
India, Iran and Afghanistan on Monday inked an agreement on the Chabahar port on the Gulf of Oman that will make it a transport and transit hub to boost trade.
The agreement was signed following a trilateral summit between Prime Minister Modi, Iranian President Hassan Rouhani and Afghan President Ashraf Ghani.
"A multiplier effect rests on the possibility that other international investors may also see the rationale of this important investment, thus paving the way for creation of a strategic bulwark that facilitates greater flow of people and goods among the three countries, as well as in the region and contributes to economic growth of Afghanistan, " Ficci said.
The agreement to develop Phase I of Chabahar port is seen as India's counter to the development of the deep - sea port of Gwadar, in Pakistan's Balochistan, located just 72 km away.
The development of Chabahar port will allow India to circumvent Pakistan and open up an alternative land - sea route for its trade with Afghanistan and beyond to Central Asia.
India has already spent $100 million in building the 220 - km Zaranj - Delaram highway in Afghanistan, also known as Route 606, which connects to Chabahar.
"The bilateral agreement to develop the Chabahar port and related infrastructure underlines the extraordinary strategic opportunities that present themselves for India in the region, " Ficci added.
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