At a formal arrival ceremony for Prime Minister Manmohan
Singh, Bush said US-Indian relations have been
transformed. Calling India an emerging economic power, Bush said the United States would push to expand economic cooperation, though he offered no specifics.

Bush is eager to improve ties with the world's largest democracy, attracted by its booming technology expertise, growing commercial market and strategic importance as a counterweight to China militarily and economically.

Touting what he called the vast potential of India-US relations, Singh hoped to persuade Bush to increase nuclear energy cooperation with India.

But Washington has balked at the long-standing request because of India's status as a nuclear power that has refused to sign the Treaty on the Non-Proliferation of Nuclear Weapons (NPT), which was designed to halt the spread of nuclear weapons.

Nuclear issue

Officials said Bush is likely to offer to step up discussions with India about ways to increase cooperation on nuclear safety and civilian nuclear issues.

But an official said ahead of Bush's talks with Singh: "It would be premature at this stage to comment on where this dialogue may take us."

A $4 billion gas pipeline between
Iran and India is on the table

Congressional aides said Washington could move to ease restrictions once India has tough export controls in place and agrees to put some of its civilian reactors under international safeguards.

John Pike, a national security expert with GlobalSecurity.org, said the administration's hands are tied for now because India has not signed the NPT. 

But Pike said the United States will eventually find a way around the restrictions on nuclear cooperation because of the economic and strategic benefits.

"I think that they will take the position that India is an exception ... because they are emerging as one of our leading strategic partners, and we're prepared to make exceptions in the case of countries that we need," Pike said.

Iran deal

The Bush administration has already said it will ease restrictions to allow American defence contractors to enter the bidding to sell new combat planes to India.

Bush's push to help India increase its coal and nuclear power generating capacity is being driven in part to give New Delhi an alternative to a proposed $4 billion gas pipeline deal with Tehran, which Washington accuses of trying to secretly develop nuclear weapons.

India has shrugged off US concerns over the pipeline despite objections raised by Secretary of State Condoleezza Rice and other senior American officials.

Administration officials say increasing US cooperation with India on nuclear power would not conflict with Bush's broader non-proliferation goals.

In February 2004, Bush promised to crack down on countries that refuse to sign new nuclear non-proliferation safeguards.