Mr Ahmadinejad's visit to Lanka, his first Asian tour, comes at a time when US President George W Bush and British Prime Minister Gordon Brown have said they are working to extend sanctions against Iran's nuclear programme. Apparently referring to its nuclear programme, Mr Narayanan said Iran had to be dealt with diplomatically, otherwise ''we all will have to pay a heavy price''. ''Don't treat Iran like any other country. Deal with it diplomatically. Otherwise we would have to pay a heavy price,'' he said. He said India, with its centuries old ties with Iran, was better placed than any other nation in dealing with Tehran.
During his visit to Lanka, Mr Ahmadinejad will launch the Uma Oya hydropower project, and would also enter into an agreement for the Sapugaskanda oil refinery enhancing project.
Mr Narayanan said India's close engagement with the great powers would not define its relations with its immediate and extended neighbourhood. He said India saw the advantage of a stable Pakistan and Afghanistan in dealing with terrorism. Pointing out that Nepal would face major challenges in its transition from Monarchy to democracy, he said India was willing to render any assistance to Kathmandu to enable it to meet these challenges.
He said India also wanted a stable Myanmar.
On India-China relations, he said it was in the mutual interest of the two countries to work in close proximity.