The United States Wednesday said the sanctions against two Indian firms, for allegedly selling missile goods and chemical arms material to Iran, were based on "credible evidence".

State Department Deputy Spokesman Adam Ereli said the sanctions were imposed on Indian companies, besides five from China and one from Austria, based on "credible evidence", but did not elaborate.

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The new sanctions against the nine firms were taken under the Iran Non Proliferation Act of 2000 that was passed to deter any support to Iran's nuclear, chemical and biological programmes.

"It is an important and effective tool in constraining Iran's efforts to develop missile and weapons of mass destruction capabilities," Ereli said.

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"It does have an impact, particularly in alerting governments to activity taking place in their countries," he added.

The six Chinese firms are all said to be government entities and the two Indian firms identified are Sabero Organics Chemical and Sandhya Organics.

Preventing proliferation of dangerous technology is difficult "and there are always going to be those who put narrow commercial self-interest above greater social good or public welfare", the State Department spokesman said.

In addition to the sanctions, the Bush administration had decided to lift restrictions imposed on one of the two Indian scientists linked to Iran's nuclear programme, The Washington Times had reported.

Restrictions imposed on Chaudhary Surendar will be lifted, but those against another scientist Y S R Prasad will remain until September 2006.