Here are the top 10 developments in this big story:
"Starting this Iran visit with a visit to this Gurdwara... We Indians have this specialty. We accept everyone and assimilate with everyone," the Prime Minister said in his address to the expat Indians after visiting the Bhai Ganga Singh Sabha Gurdwara.
PM Modi's visit comes four months after the sanctions on Iran were lifted and the international community is re-engaging with the nation.
At the Teheran airport, PM Modi was received by Iran's Finance Minister Ali Tayyebnia. On reaching, he tweeted in Persian, "Reached Iran, a land with whom India shares civilisational ties. Hope to enhance economic partnership between our nations."
Today, he is expected to meet Iran's top leadership, including President Hassan Rouhani following a ceremonial welcome. He will also meet Iran's supreme religious and political leader Ayatollah Khamenei.
The centerpiece of PM Modi's visit will be the signing of a trilateral agreement on Chabahar -- a strategic port in the Gulf of Oman on Iran's southern coast with Afghanistan.
India will help develop the port, investing in the first phase around $200 million to develop terminals and cargo berths at Chabahar. In the next phase, India plans to build a 500-km railway line between Chabahar and Zahedan.
Ahead of PM Modi's visit, India has cleared part of its $6.4 billion oil dues to Iran. Discussions will also be held on the modalities of payment for the rest. The bilateral talks will also feature Indian firms securing rights to develop the offshore Farzad-B gas field, which was discovered by ONGC Videsh.
During PM Modi's visit, Afghanistan and Iran will sign an agreement to set up a trade and transport corridor with Chabahar as the hub.
With this, landlocked Afghanistan will get access to the Iranian port as an alternate to the Pakistani port of Karachi. It will also provide India with another route to into Afghanistan - with which it has developed close diplomatic and strategic ties. Now India does not have access to Afghanistan on a land route due to opposition from Pakistan.
India's move is also being seen as a balance to China's influence in Pakistan. Chabahar is 100 km from Pakistan's Gwadar port, which China is developing. The Chinese project comes on the heels of its investments in Sri Lanka, Bangladesh and the Maldives.
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