While some recent Indian media reports have indicated New Delhi might be having doubts over the political viability of the pipeline – primarily because of American unease over Iran’s nuclear programme - oil minister Mani Shankar Aiyar has said India is determined to implement the project.

India's energy needs cannot be fulfilled without gas from Iran, Aiyar has said.

The Iranian Deputy Petroleum Minister for International Affairs, M H Nejad Hosseinian, said at the end of the two-day India-Iran Special Joint Working Group meeting this week that the framework for the proposed pipeline was likely to be finalised by December.

This framework would also indicate whether each country would go into the project separately or an international consortium would be set up. A joint venture approach would enable India to have more input into the project.

Hosseinian admitted project costs had increased by 20-30% from the initial estimates, mainly because of higher world steel prices, but reiterated that the project remained the cheapest and best way of assuring adequate energy supplies to India and Pakistan.

Gas supplies to both countries could start within five years of the three countries signing the necessary contracts.

Talks over a gas pipeline from Iran to India, passing through Pakistan, began in the early 1990s but have been plagued with political problems. But in mid-June, India agreed to purchase US$22 billion worth of natural gas from Iran from late 2009-early 2010 for a 25-year period.