TEHRAN, Jan. 14 (Xinhua) -- Iran and India have signed a deal worth 2 billion U.S. dollars for cooperation in the rail sector, the Financial Tribune reported on Sunday.

The agreement was inked Friday in India's capital New Delhi in the presence of Abbas Akhoundi, Iran's minister of roads and urban development, and his Indian counterpart Nitin Gadkari, the report said.

The deal included a memorandum of understanding (MoU) worth 600 million dollars that will enable Iran to purchase locomotives and freight cars from India.

"This project will come on stream within next three years and part of the locomotives will be manufactured in Iran. We are willing and trying to turn the MoU into a contract," Akhoundi was quoted as saying.

"Our cooperation with India means we will be provided with the latest global advancement in rail technology and industry," he said.

Fo his part, Gadkari said the new trains will help transport passengers and freight in Iran.

"They will also be used in the Chabahar-Zahedan railroad to accelerate development of the Chabahar Port in line with India's goal to connect to Central Asia and ultimately Europe through this Iranian port," he said.