Both the countries, however deferred the signing of agreements on cooperation in agriculture, higher education, health, pharmaceuticals, housing, trade, security, capacity building, counter terrorism and cooperation in parliamentary and cultural affairs to a later date.

India has sought to diversify its economic engagement with Iraq beyond the buyer-seller relationship in oil trade by striking a bilateral agreement on energy cooperation. India meets about 12.9% of its oil imports from Iraq by shelling out $ 20 billion a year.

Indian industry has complained about the delays in making payment due to Iraqi dinar and US dollar problem. They have also complained bout Iraqi tenders not specifying equipment of Indian origin for purchase while it insists on equipment of European, US and Japanese origin. Both sides have, however, decided to resolve these issues.

According to the MoU signed on energy cooperation setting up of joint ventures in upstream and downstream oil and gas and related infrastructure has been envisaged. Specific areas identified are for conclusion of contract of exploration Block-8 awarded to ONGC Videsh Limited in Iraq, offer of data of Middle Furat group of fields for due diligence, exploration of natural gas, setting up of petroleum refineries and training.

India will assist Iraq in the development and management of its water resources devastated by intermittent wars.

“Prime Minister Maliki and I have agreed that our energy trading relationship should be turned into a strategic partnership, including through joint ventures in oil exploration, petrochemical complexes and fertilizer plants. The Inter-Governmental Memorandum of Understanding on Cooperation in the field of Energy will provide a very strong framework to further diversify our cooperation in this sector and we look forward to concrete progress in the near future. We also agreed to expand and diversify our economic cooperation, which, as our Joint Commission recently identified, would cover areas such as agriculture, water resource management, pharmaceuticals, health care, information technology, infrastructure, low cost housing and trade,” said the Indian Prime Minister Dr Manmohan Singh after the delegation level talks with the visiting Iraqi Prime Minister Nouri Kamil al-Maliki here on Friday.

The Iraqi Prime Minister said “we depend upon India’s experience and expertise to re-build our war raged nation.”

“Iraq was the largest project export destination for Indian companies before the Gulf War. I underlined to Prime Minister Maliki the strong interest of Indian companies to participate in Iraq’s reconstruction efforts and its ambitious plans to expand and upgrade its infrastructure,” said Dr Singh.

Earlier in the day the Iragi Prime Minister al-Maliki address a business summit organized by the three apex industry bodies – FICCI, CII and Assocham. He appealed to the Indian industry to invest in bilding his country’s infrastructure.