India is looking for a long-term deal to secure imported oil from Iraq but, as part of the deal, it wants to be released from the letter of credit (L/C) terms the two countries currently use.

Iraq last year became India's second largest supplier of oil, with a share of over 12 per cent of oil imports last year.

New deal

India has proposed a 10-year deal to meet increased crude oil demand.

The proposal was lodged on a recent visit to India by Iraqi prime minister, Nouri Al-Maliki, during his talks with Indian prime minister, Manmohan Singh.

L/C terms

Under the proposal, the Indian side is seeking release from the L/C terms on which the two countries currently trade.

India has also asked that under the proposed new deal, the interest-free credit period of 30 days it currently enjoys should be extended to 60 days.

The Iraqi side assured Indian negotiators that they would consider both these aspects of the proposal.

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