NEW DELHI, July 26: Iran and India on Monday discussed a proposed US$3 billion gas pipeline through Pakistan, an idea the two countries have been pursuing for the past seven years without success, an official said.

"The matter was discussed. It is going to be discussed further, studied further," External Affairs Ministry spokesman Navtej Sarna told reporters after talks between the foreign ministers of India and Iran, Natwar Singh and Kamal Kharrazi.

Iran has been pursuing the pipeline proposal with India and Pakistan since 1996, but tensions over Kashmir have blocked progress. Pakistan would have access to the gas, and earn an estimated US$600 million a year in transit fees. Iran says the proposed 2,600-kilometre pipeline would save India around US$300 million a year in energy costs.

The previous Indian government of Atal Bihari Vajpayee even considered laying the pipeline under the sea to avoid Pakistani territory. However, India's new government, which took office last month, appears to have softened the country's position.

Kharrazi also met with Prime Minister Manmohan Singh and National Security Adviser J.N. Dixit. Singh said he has an "open mind" towards Iran's proposal for a pipeline to supply natural gas to India through Pakistan, the Press Trust of India news agency reported. -AP