India’s Exim bank will extent a line of credit worth $150m to Iran, supplying 150,000 tonnes of railway tracks. India has had a significant trade deficit with Iran since 2006/07 due to a surge in oil imports, but expects greater access to the Iranian market with the removal of international sanctions.

Announcing the deal, Ali Ashraf Afkhami, chairman of the board and managing director of Iran’s Bank of Industry and Mine, said the post-sanctions era marks a new phase of Iran’s history and that the country’s leaders should work to develop Iran in this challenging period.

The news follows the launch of a Chinese-backed project to electrify more than 900km of railway between the capital Tehran and the north eastern city of Mashad last Saturday.

The agreement between China and Iran was finalised in January during a visit to the country by Chinese president Xi Jinping.

The project, said to be worth $2bn, will be financed and implemented by the Chinese. On completion it could facilitate journeys between Tehran and Mashad in six hours, providing faster, more energy-efficient journeys for more people.

Iran has a pipeline of uncompleted infrastructure projects that had to be suspended due to the financial constraints of international sanctions, and is likely to look to reinvigorate them now following implementation day on 16 January.

Sanctions were lifted following confirmation that the country had complied with the obligations of a US-led agreement that required Iran to curb its nuclear programme.