HYDERABAD, India - Prime Minister Mahathir Mohamad arrived in India's high-tech southern city of Hyderabad yesterday to began a six-day overseas tour that will also take him to Pakistan and Saudi Arabia.

Mahathir visited information technology centres and met business leaders in Hyderabad, a historical Muslim city that is one of India's fastest-growing high-tech hubs.

"Indians are famous for their software expertise and we have a shortage so there is great scope for IT cooperation between us," said Mahathir.

He also hinted at the revival of a stalled auto project between the Andhra Pradesh government and Malaysian carmaker Proton in which the Malaysian government is the controlling shareholder.

"There have been some hitches ... We are working on them," said Mahathir when asked by reporters if the Proton small car aimed at the Indian market would ever get off the drawing board.

"I am sure the prosperous middle class in India would not mind a greater variety in their choice of cars," he added.

India opened its car sector after sweeping free-market reforms in 1991. It was previously dominated by antiquated versions of British models and Italy's Fiat.

Crowded auto market

Small cars enjoy a 60 percent market share of the crowded Indian auto market. India's largest carmaker, Maruti Udyog Ltd, commands the lion's share of the market despite the entry of global auto giants such as Hyundai, Ford, Daewoo, Fiat and General Motors.

Mahathir will head today for New Delhi for talks with his Indian counterpart Atal Behari Vajpayee and President APJ Abdul Kalam expected to focus on trade.

The Malaysian leader is accompanied by his wife, Siti Hasmah Mohamad Ali, and a delegation including Foreign Minister Syed Hamid Albar and Primary Industries Minister Lim Keng Yaik.

Mahathir goes on to Pakistan on Friday for talks with President Pervez Musharraf before leaving for Saudi Arabia on Saturday.

India's Foreign Minister Yashwant Sinha said during a visit to Kuala Lumpur last month that Malaysia is India's largest trading partner in the 10-member Association of Southeast Asian Nations (Asean), with bilateral trade worth RM7.22 billion.

Malaysia's exports to India consist mainly of palm oil and gas, while it imports food and agricultural products.