This was stated in the 1998-99 annual report of the Defence Ministry.

Describing China as the ``largest neighbour'', the report said New Delhi had expressed time and again its interest in resolving the boundary dispute with Beijing ``peacefully and through bilateral negotiations as quickly as possible.''

Reviewing developments over the past ten months, especially after the nuclear tests of May 11 and 13 last year, it said these tests ``have helped forge a relatively stable national security environment for India''.

``There is already a greater international acceptance of the compelling logic for India to develop a credible minimum deterrent against the use or the threat of use of weapons of mass destruction,'' the report said, adding New Delhi's approach was aimed at greater regional and international stability.

Thisapproach, it said, was entirely in consonance with India's consistent efforts towards ultimate elimination of all weapons of mass destruction.

The paper, which officially outlines India's overall security perspectives, stated that global disarmament process ``has to be based on universal and non-discriminatory treaties and on the principles of equal security for all''.

Stating that India has maintained the unilateral moratorium on explosive nuclear tests, the report said the Government was currently engaged in discussions with key interlocutors ``on a range of issues including the CTBT (Comprehensive Test Ban Treaty).''

The Government was also engaged in negotiations in the conference on disarmament on a treaty banning production of fissile material, the report said.

It asserted that ``India has an effective export control mechanism in place to prevent the unauthorised transfer of sensitive equipment, material and technologies. This mechanism is continuously refined and updated.''

Without referringto any country, the report, while delving on India's disarmament policy, said, ``The clandestine and illegal transfer or receipt of sensitive materials, equipment and technology by some countries should not be overlooked or condoned for the sake of political expediency.''

On relations with neighbours, it said Beijing's ``assistance to Pakistan's nuclear weapons programme and the transfer of missiles and missile technology to Pakistan affect (sic) the security situation in South Asia.''

It referred to Prime Minister Atal Behari Vajpayee's bus trip to Lahore and said it ``once again demonstrated India's deep desire for peaceful, friendly and cooperative relations with Pakistan.''