Recent research has shown that nanofluids have several potential applications in engineering, biology and medicine. New promising applications of nanofluids are emerging for improved critical heat flux and in-vessel retention capability in light-water reactors. The transport properties of such fluids will clearly be of importance in such applications. Transport in nanofluids is still an inadequately understood subject. Several recent papers claim that the averaging procedures used in predicting transport properties of particle suspensions result in severe underprediction when the particle sizes are in the nano-range. In our labs at IIT Bombay and in IGCAR, we have been studying, respectively, heat transport and mass transport (Komati and Suresh, 2010; Philip et al 2007). In this proposal, we seek to extend our earlier work, in order to conclusively establish (a) whether there is an anamolous effect on molecular transport of heat and mass due to nanoparticles, (b) if so, whether the analogous behaviour of transport phenomena in normal fluids extends to nanofluids, and in any case, (c) to conduct molecular dynamics simulations to study the phenomenon from a simulation approach to complement the experimental approach and to gain mechanistic insights into transport in nanfluids. We seek to address the above objectives based on the complementarity of strengths that exist at IITB and IGCAR.