The port in the Sistan-Balochistan province on the energy-rich nation's southern coast lies outside the Persian Gulf and is easily accessed from India's western coast and is considered as a "gateway to golden opportunities" for trade with central Asian countries.
The first phase of the Chabahar port project is known as the Shahid Beheshti port and it was inaugurated by Rouhani in the presence of representatives of several countries of the region.
According to the Ministry of External Affairs, Minister of State for Shipping Pon Radhakrishnan represented India at the inauguration.
"The routes of the region should be connected on land, sea and air," Rouhani said at the inauguration ceremony, according to his office.
The port is likely to ramp up trade between India, Afghanistan and Iran in the wake of Pakistan denying transit access to New Delhi for trade with the two countries. India has been closely working with Afghanistan to create alternative, reliable access routes, bypassing Pakistan.
Under the agreement signed between India and Iran in May last year, India is to equip and operate two berths in the Chabahar Port Phase-I with capital investment of $85.21 million and annual revenue expenditure of $22.95 million on a 10-year lease.
Rouhani's office said the president noted that transit is the best communication tool for nations, adding "the routes of the region should be connected on land, sea and air".
Ahead of the inauguration of the port, External Affairs Minister Sushma Swaraj on Saturday met her Iranian counterpart Javed Zarif in Tehran during which the implementation of the Chabahar port project was discussed among other issues.
Swaraj made a stopover at Tehran on her return from Russian city of Sochi where she had attended the annual summit of the Shanghai Cooperation Organisation (SCO).
Over a month ago, India sent its first consignment of wheat to Afghanistan by sea through the Chabahar port, marking opening of the new strategic transit route.