At a recent meeting chaired by Prime Minister Manmohan Singh, the union cabinet discussed the country's plan to develop infrastructure in and around the Chabahar Port in Iran.

It is learnt that the government may formally announce its decision on developing the port infrastructure after  External Affairs Minister Salman Khurshid discusses the same with Iran’s Foreign Minister Ali Akbar Salehi in Tehran. Khurshid will meet Salehi during his visit to the sanction-hit West Asian country.

According to some reports, India may commit about $100 million to develop the Iranian port. India is also likely to announce a project to build a fertiliser plant near the strategically important port in south-east Iran.

In order to discuss trade and economic issues the India-Iran Joint Commission will hold a meeting that would be presided by Khurshid and Salehi.

India feels the need to strengthen its presence in Iran by investing in the port because China’s Overseas Port Holding Company recently acquired management of the commercial port in Gwadar on the southwestern coast of Pakistan.

Chinese People’s Liberation Army Navy has since long been using the Gwadar Port, which New Delhi perceives as yet another strategic asset China is acquiring to encircle India.