Prime Minister Atal Bihari Vajpayee announced the agreement in a statement in New Delhi after President George W. Bush made an identical statement at a Summit of the Americas in Monterrey, Mexico.

"The expanded cooperation launched today is an important milestone in transforming the relationship between India and the United States of America," Vajpayee said.

The statement said the two countries had agreed to expand cooperation in civilian nuclear activities, civilian space programmes and high technology trade and also to expand dialogue on missile defence.

"Cooperation in these areas will deepen the ties of commerce and friendship between our two nations and will increase stability in Asia and beyond," it said.

The agreement is the result of nearly two years of painstaking and delicate negotiations between officials and strategic experts of the two countries and is expected to boost bilateral trade.

It came a week before External Affairs Minister Yashwant Sinha's visit to Washington for talks with Secretary of State Colin Powell.

The agreement on cooperation in hi-tech trade will give access to India to high technology products in the US, including those with dual-use technology that have both civilian and military applications which had till now been denied to it due to proliferation concerns.

The statement said the proposed cooperation would progress through a series of reciprocal steps that will build on each other.

"The vision of India-US strategic partnership that President (George W.) Bush and I share is now becoming a reality," Vajpayee said.

"It will include expanded engagement on nuclear regulatory and safety issues and missile defence, ways to enhance cooperation in peaceful uses of space technology and steps to create the appropriate environment for successful high technology commerce," he said.

Addressing US concerns about proliferation, the statement said: "In order to combat the proliferation of weapons of mass destruction, relevant laws, regulations and procedures will be strengthened and measures to increase bilateral and international cooperation in this areas will be employed.

"These cooperative efforts will be undertaken in accordance with our respective national laws and international obligations."

It said India-US relations were based increasingly on "common values and common interests" and added the two countries were working together to promote global peace and prosperity.

"We are partners in the war on terrorism and we are partners in controlling the proliferation of weapons of mass destruction and the means to deliver them," the statement declared.

Vajpayee recalled that in November 2001, he and President Bush had committed their countries to a strategic partnership.

"Since then, our two countries have strengthened bilateral cooperation significantly in several areas," the statement said and added Tuesday's announcement was the "next step in implementing our shared vision."