Dhaka, March 12 -- Iran will allow India-flagged tankers to transit the Strait of Hormuz, through which 40 per cent of India's crude imports pass, an Indian source said on Thursday, though an Iranian source based outside the country denied any such agreement had been reached.

India's foreign ministry and the Iranian embassy in New Delhi did not immediately respond to requests for comment.

The Indian source declined to be named, citing a lack of authorisation to speak to the media, while the Iranian source pointed to the sensitivity of the matter, reports Reuters.

A Thai vessel bound for Kandla port in western India was attacked in the Strait on Wednesday, prompting strong criticism from New Delhi.

"India deplores the fact that commerc...