New Delhi: India today (Jan 16, 2004) announced a soft loan of $ 10 million to Mongolia as the two countries agreed to strengthen their Defence co-operation and strongly condemned the menace of international terrorism.

The soft loan would be for procurement of items from India and for India-linked projects in Mongolia, a joint statement issued at the end of the six-day visit by Mongolian Prime Minister Nambariin Enkhbayar said.

Underlining the importance of reforms and restructuring of the UN system, Mongolia said it would "fully support" the candidature India, "a large Democracy and emerging economic power", for permanent membership of an enlarged UN Security Council.

The two sides decided to further develop and strengthen Defence co-operation, within the framework of the agreement on co-operation in Defence matters, including training of Mongolian military officers in India.

Enkhbayar, who held extensive parleys with Vajpayee, called on President A P J Abdul Kalam and Vice-President Bhairon Singh Shekhawat besides holding meetings with Ministers for External Affairs, Defence and Communications and Information Technology.

During his visit, the two countries signed five agreements and agreed to elevate their relations to a new level of partnership, the statement said.

Both sides condemned the menace of international terrorism and its devastating effect on Democratic societies.