26-07-04 Iran and India discussed the possibility of building a $ 3 bn gas pipeline through Pakistan, a proposal the two countries have been pursuing for the past seven years without success, a government spokesman said.
"The matter was discussed. It is going to be discussed further, studied further," External Affairs Ministry spokesman Navtej Sarna told after talks between the foreign ministers of India and Iran, Natwar Singh and Kamal Kharrazi.

Iran has been pursuing the pipeline project with India and Pakistan since 1996, but persistent tensions between the two South Asian nations over the Himalayan region of Kashmir have blocked plans. The previous government of Atal Bihari Vajpayee even considered the possibility of laying the pipeline under the sea to avoid Pakistani territory. However, India's new government, elected in June, appears to have softened the country's position.
Kharrazi also met with Prime Minister Manmohan Singh and National Security Adviser J. N. Dixit. Prime Minister Singh said he has an "open mind" on Iran's proposal to have a pipeline to supply natural gas to the country through Pakistan, the prime minister said.

Iran says the 2,600 km pipeline would save India around $ 300 mm a year in energy costs, and experts say it would help India overcome its energy deficit. Pakistan, which is ready to provide international security guarantee, also would have access to the gas, and earn about $ 600 mm a year in transit fees.
Sarna said the two sides focussed on cooperation in energy sector, transit trade and economic cooperation.
"India has offered a $ 200 mm credit line which could be used by the private sector of the two countries to mutual advantage," the spokesman said.

The two-way trade between India and Iran has grown to $ 2.9 bn from $ 500 mm some years ago, mainly covering the oil sector, automobile parts, pharmaceuticals and information technology, Sarna said.
"The two sides also talked of the North-South corridor which would also enable India's goods to reachCentral Asian markets" through Iran and Afghanistan, Sarna said.

India is building a port in Chahbahar, Iran, and would like to link it by road to Afghanistan.
"They also touched on Afghanistan and developments there and both looked forward to continuing to cooperate in various sectors in Afghanistan. Their was support expressed for the present government in Kabul and there was concern expressed at the continuing challenge to security and the spread of narcotics," he said.