US Secretary of State Condoleezza Rice and her Indian hosts on Saturday hailed a deepening "strategic partnership," even if last-minute hitches derailed the signing in New Delhi of a landmark civil nuclear agreement.

Both sides promised to sign the deal soon, after bureaucratic hurdles are cleared, but said it highlighted a dramatically transformed relationship and what Rice calls "a recognition of India's emergence on the global stage."

New Delhi, which steered an independent course from Washington during the Cold War era, now looks to the United States as its largest trading partner and largest source of investment, said Rice's Indian counterpart Pranab Mukherjee.

Ties, Mukherjee said, will grow further as the nuclear deal allows India to build more nuclear reactors to satisfy its surging demand for energy at a time of skyrocketing oil prices and global warming fears.

"Whether it is energy, anti-terrorist steps, trade or high technology, India's quest to build a knowledge society leads us to work very closely with the USA," said India's external affairs minister.

"It is this agreement which has opened the door for India for international nuclear commerce," Mukherjee acknowledged at a packed press conference in New Delhi on Saturday night, with Rice seated next to him.

The two countries had spent three years negotiating the deal since President George W. Bush and Indian Prime Minister Manmohan Singh first agreed to it in 2005 as part of a strategic partnership between the two biggest democracies.

Rice and others had to lobby hard to win approval for the deal from the International Atomic Energy Agency (IAEA), the UN nuclear watchdog, and the Nuclear Suppliers Group (NSG), which controls global atomic trade.

She also pushed hard for the agreement -- which lifts a ban on civilian nuclear trade imposed after India first conducted a nuclear test explosion in 1974 -- to be approved by both Houses of Congress.

Lawmakers had sought safeguards on preventing the spread of nuclear weapons technology before passing it overwhelmingly last week and handing the increasingly unpopular Bush administration a foreign policy success.

But critics say it still undermines global efforts to curb the spread of nuclear weapons, because India has refused to sign the international non-proliferation treaty (NPT).

The pact offers India access to sophisticated US technology and cheap atomic energy in return for New Delhi allowing UN inspections of some of its civilian nuclear facilities.

Military nuclear sites will remain closed to international inspections.

Prime Minister Singh has had a rough ride over the deal at home.

The main opposition Hindu nationalists and the Communists have both slammed it as curbing India's military options and bringing the country's foreign policy too much under US influence.

During the flight to New Delhi, Rice said Washington expected a fair shake for its businesses in return for its hard work.

"I think the Indians recognise that the United States took that strategic step and helped India get through the NSG and the IAEA and so forth, but ultimately what Amerian companies are really asking is an opportunity to demonstrate what they can do," Rice told reporters.

"One would expect that economic, defense relations, a whole range of relationships including business relationships, will flourish, but they will flourish on their own terms," she said.

"We are in actually discussions with the Indians about military sales. That's another channel," she added.

Both sides said cooperation also includes education and agriculture as well as efforts to fight Islamist militancy in the region and promote economic and political stability in central Asia, particularly in Afghanistan.

As for the nuclear deal, even after it is signed, US firms that build reactors and provide nuclear know-how, like General Electric and Westinghouse, cannot do business until New Delhi signs a safeguards agreement with the IAEA.

In an interview with AFP last week, John Rood, a senior State Department official who worked on the nuclear deal, brushed aside suggestions that the US partnership with India is designed as a counterpoint to China's rising power.

Rice was scheduled to leave for the central Asian republic of Kazakhstan later Sunday.

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