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India offers Iran $200-mn line of credit

India on Thursday offered Iran a line of credit of $200 million for its economic development plan even as the two countries accorded each other most favoured nation status for expansion of trade and commercial activities.

Addressing the Iranian chamber of commerce, industry and mines here, Prime Minister Atal Bihari Vajpayee also suggested a five-pronged strategy to provide a fresh impetus to bilateral economic ties in the oil, information technology and other key sectors.

Vajpayee declared that his Government would keep all its options open on the proposed pipeline for supply of gas from Iran to India while ensuring it is cost effective and secure.

"The terms and condition of this credit facility can be worked out to mutual satisfaction of the two governments," he told top Iranian and Indian businessmen.

Minister of State for Industry and Commerce Omar Abdullah said the MFN arrangement would give the necessary impetus to boost two-way trade.

Suggesting that the two sides should examine the possibility of a Preferential Trade Agreement, Vajpayee said to allow such an arrangement to work effectively, a supporting financial and credit facility was necessary.

Observing that inadequacy of banking systems was a handicap in boosting economic ties, the prime minister said the Reserve Bank of India would "soon" accord necessary permission to Tejarat Bank of Iran to open a branch office in India.

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