India and Burma have signed a major transport agreement linking a Burmese port with part of north-east India via road and river connections.

The $120m project will allow India to develop Burma's Sittwe port on Kaladan river from where goods will be ferried.

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The agreement was signed between the second most powerful figure in the Burmese government General Maung Aye and vice president of India Hamid Ansari.

Burma awarded India the right to "build, operate and use" the port of Sittwe, strategically located in the Bay of Bengal.

When India begins using the Sittwe port, it would help make Burma's Kaladan river navigable all the way up to neighbouring India's north-eastern Mizoram state.

This would, in turn, lead to India upgrading highways connecting Mizoram with the rest of the country to boost trade.

(BBC)

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