DATE=11/29/00

TYPE=CORRESPONDENT REPORT

TITLE=India Iraq (L-only)cq

NUMBER=2-269818

BYLINE=Anjana Pasricha

DATELINE=New Delhi

CONTENT=

VOICED AT:

///Editor's: The spelling of the Iraqi Vice President should be Taha Yassin Ramadan, not Ramadhan, even though at least one wire service disagrees.///

INTRO: Iraq's Vice President Taha Yassin Ramadan is in India on a five-day visit. Anjana Pasricha reports from New Delhi, India plans to

purchase oil from Iraq in exchange for food grains.

TEXT: Indian officials say New Delhi and Baghdad have reached an understanding to exchange Indian wheat for Iraqi crude oil. Indian Foreign

Ministry spokesman Ramindar Jassal says the deal will only be implemented if it is approved by the United Nations Sanctions Committee.

/ / / INSERT JASSAL ACTUALITY / / /

India and Iraq have been discussing the possibility of a counter trade arrangement which would enable Iraq to effect import of food items specially wheat against the export of crude oil and oil products. An understanding on this has been reached in principle. We will engage in consultations with the UN Sanctions Committee.

/ / / END JASSAL ACTUALITY / / /

Newspaper reports in New Delhi have suggested that Iraq has agreed to sell oil to India at rates much cheaper than international prices.

Iraqi and Indian officials neither confirmed nor denied the reports. At a news conference Vice President Ramadan said that Iraq sells oil at prices determined by the market and the nature of the bilateral relationship with a country.

The United Nations Sanctions Committee said this week Iraq could not price its oil below fair market value. Iraq has to sell its oil at UN approved prices.

India will also assist Iraq in an oil exploration project. Vice President Ramadan has asked Indian industry to help rebuild the country's economy

that has been shattered by UN sanctions. Indian companies are likely to collaborate in several projects to rebuild infrastructure in Iraq.

Iraq, which has been isolated from the international community since its 1990 invasion of Kuwait is eager to revive political, trade and economic relations with India. Mr. Ramadan said his visit has helped the two countries prepare a framework for a long-term, strategic relationship. He has met senior Indian officials including Prime Minister Atal Behari Vajpayee.

India in turn sees Iraq as playing a crucial role in fulfilling its oil requirement, and has extended a warm welcome to Mr. Ramadan. India imports most of its oil and has been badly hit by the recent rise in the international prices of crude oil.

On the eve of the Iraqi leader's visit to New Delhi, Indian Foreign Minister Jaswant Singh said in Parliament that United Nations sanctions on Iraq were "unwise" and "unjust", and should be lifted. (signed)

NEB/AP/PLM