Washington has reportedly requested India to send one division, between 17,000 and 20,000 soldiers, to take part in peacekeeping operations in Iraq.

"Political considerations will play a prime role but it makes sound business sense for the Indian government to accede to the US request," said Gautam Mahajan, chairman of the economic relations cell of the Delhi-based Indo-American Chamber of Commerce.

"We need to get a stronger presence in Iraq and this might be a way of doing it. Indian companies will find opportunities in Iraq whether we send our soldiers or not but there is no doubt that the paybacks will be much, much higher if we do."

Several Indian companies, including state-run Engineers India Limited and private sector Jindal Saw Pipes are hoping to land contracts to build Iraq's battered infrastructure.

"Indian firms have landed small contracts for providing machines, spare parts and services to US and British troops. But there are multimillion-dollar contracts up for grabs," said an official from the Indian Machine Tool Manufacturers Association.

"If the government plays its cards right by showing support for the US the Indian private sector could end up reaping huge benefits," he added.

US officials have reassured New Delhi that Indian firms will not face discrimination in Iraq even if it turns down Washington's request.

India opposed the US-led war on Iraq, with its parliament issuing a call for the "immediate withdrawal" of troops from Iraq.

The issue of sending troops to Iraq has also become a huge domestic political problem for Prime Minister Atal Behari Vajpayee as India's main opposition Congress party and others have strenuously opposed the move.

Some political leaders have insisted any troop deployment receive the blessing of the United Nations, which was deeply divided over the war.

The cash-strapped Indian government is also worried about having to foot the bill for maintaining thousands of soldiers in Iraq.

"A soldier on a UN mission normally receives a 250-dollar monthly perk," said K. Subramanium, a former member of India's military think tank, the Institute for Defence Studies and Analyses.

"This means that the Indian government will end up spending over 20 million dollars itself in monthly perks. Tote up salaries, cost of transportation and living costs in Iraq for 20,000 soldiers to the monthly perks to get the grand total."

Despite the expense India's business lobby has been pushing for an Indian deployment to curry favour with Washington.

"The US will not pay a single paisa (cent) towards the logistical costs for the 20,000-odd Indian troops in transportation, upkeep, salaries as well as the cost of the operation," said The Indian Express newspaper.

"Nevertheless, there seems to be a growing temptation within the government not to turn down the US offer, especially as it would give New Delhi the opportunity to play in the big league."

India's US-centric software sector is reported to be actively lobbying the government to send troops to Iraq to thwart a tide of US legislative proposals to restrict outsourcing.

But India's powerful software lobby group, the National Association and Software and Service Companies, declined to comment.

The United States is considering a raft of legislation to halt companies, looking to cut costs, from outsourcing jobs to India which has a large pool of English-speaking, computer-proficient labour.

The outsourcing sector logged about 60 percent growth in the year ended March 2003 and is projected to surge by 55 percent to 3.6 billion dollars in the current fiscal year.

WAR.WIRE