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That move will allow you to add a new color. When you are in Indexed mode you are restricted to using only the colors that are already in the indexed pallette.
After you've got the line looking the way you want, go back to Indexed color before you Save.
In this particular case, raja4 is working with a tiled background image that has only 2 or 3 colors. Adding one more color won't create a problem to stay with the gif format -- in fact, it's the best way to go.