Prime Minister Narender Modi and Afghanistan President Ashraf Ghani jointly inaugurated Kabul's Stor Palace via video conference.
He also called the monument a "setting for many momentous historical events".
"The inauguration signalled and showed our joint commitment to strengthening the foundations of modern Afghanistan. The India-Afghanistan-Iran transit corridor agreement that we signed in May this year was another land mark in our partnership," Modi said.
"It manifested our clear and common determination to build new pathways for Afghanistan's economic progress and prosperity," he said.
"The palace has been the setting for many momentous historical events. To those who cannot see beyond shadows of violence in Afghanistan, the restored Stor palace is a reminder of the glory of Afghanistan's rich traditions," the PM added.
The government had promised to help Afghanistan refurbish many of its war damaged structures, among which were Executive Block of Afghan Parliament building and the Stor Palace in Kabul.