President Barack Obama arrived for his state visit to India today amid military pomp, extraordinary security precautions in New Delhi, and a warm hug from Indian Prime Minister Narendra Modi, a leader who was on America's "no visa" list over human rights issues at the time of his election last year.

The two men quickly got down to business. Within hours of his arrival a delighted Obama and Modi announced an agreement that could pave the way for billions of dollars in contracts for American nuclear power companies. Though details weren't released, the two men told a press conference that an "understanding" had been reached to modify strict liability laws to protect US nuclear suppliers in case of an accident.

The two also announced an agreement to jointly produce drones and parts for Lockheed Martin's C-130 military transport plane.

Solidifying stronger ties between the two countries hasn't been easy in the past, and long-term fruits from this visit are far from a sure thing. When President Obama visited New Delhi in 2010, he described the US-India relationship as the “defining partnership” of the 21st century. But moving past a traditionally lukewarm relationship has been difficult.

"We have to convert a good start into lasting progress. This requires translating our vision into sustained action and concrete achievements," Mr. Modi said at a joint press conference with Obama.

Obama and Modi apparently hit it off last fall during a Modi visit to Washington – with Obama giving his guest a spontaneous tour of the Martin Luther King Jr. memorial. Both men rose from modest backgrounds to lead their nations of 316 million and 1.2 billion, respectively, and this seemed to provide a common bond.

Upon touchdown in New Delhi today, Obama became the first American head of state to visit India more than once, and tomorrow he will be the first to be guest of honor at India’s Republic Day parade, which celebrates the Indian Constitution coming into force in 1950.

Apart from the evident good personal vibes, the Sunday visit is intended to ameliorate a recent string of often-petty grievances. And officials from both governments have been working overtime to ensure the encounter delivers more than just a colorful handshake.

“This is an important visit. But it must go beyond the symbolism, which I think is no doubt important in itself,” says Kanwal Sibal, India’s former foreign secretary. “Both sides have to bridge differences on some key issues.”

Indeed, US-India divides are deeper than recognized, ranging from cold-war-era strategic outlooks to potential American investment. A brief issued Jan. 22 by the Carnegie Endowment for International Peace counsels the US president not to look for a quid pro quo with Modi, but to return to the approach Washington took with India at a time when the subcontinent often sided with the former Soviet Union and the US expected little.

Obama should think of building Indian ties as an “investment,” says report author Ashley Tellis of Carnegie.

Other matters likely to come up include US troop withdrawal in Afghanistan and its implications for India’s security, as well as border tensions between India and Pakistan. Trade is a priority: In a visit here earlier this month, US Secretary of State John Kerry said the US wants to increase bilateral trade from its current $97 billion to $500 billion, close to the current US-China trade figure. Secretary Kerry identified defense, trade, climate change, and nuclear power as the four key agenda items.

The problems – and the wide divides – lie in the details.

For example, while Obama and Chinese President Xi Jinping just agreed to a major greenhouse gas reduction target, India, one of the world’s leading emitters of greenhouse gases, has stoutly refused all requests to reduce its carbon footprint.

India's strict liability laws have long been a thorn in America's side, with US trade officials complaining that their counterparts in New Delhi imagine that Washington can easily or simply talk private firms out of their fears and get them to invest.

Defense cooperation is far more certain. US-India military exercises have grown in frequency, and today the US is India’s biggest arms supplier, even if many of the heavy weapons Obama will observe during Monday’s parade are made in Russia. The visit is expected to yield a further phase of a defense agreement dating to 2005 involving technology transfer, research, and anti-terror measures.

And the two sides have both been heartened by regional developments. Both New Delhi and Washington, for example, were gratified when Sri Lanka’s pro-China presidential candidate unexpectedly lost his race earlier this month, an outcome likely to curb Beijing’s plan to increase its presence off India’s southern coast.

“It is clear that Washington has now come to accept the centrality of India to any future Asian pivot or re-balance,” argues Manoj Joshi, a defense analyst at Observer Research Foundation, a Delhi-based think tank.

Mr. Tellis argues in "Unity in Difference: Overcoming the US-India Divide," the Carnegie publication, that "it is in US interests to bolster Indian power even if no repayment is forthcoming because doing so will help limit the rise of a Chinese hegemon in Asia that could undermine the enduring strategic interests of the United States."

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Obama's visit has generated huge excitement in India. Media here are agog with reports about his security, his agenda for talks, where Obama might travel and how he will get there. Even Delhi's stray dogs and monkeys were shooed away from Obama's route from the airport. The American president is admired in India, largely for his support for an Indian seat on the UN Security Council, even if the endorsement is symbolic.

(This story combines wire service reporting and material from an earlier Monitor story on Obama's visit to India).