Modi made the decision himself to break with tradition, media reports said.

Obama's presence at today's India's Republic Day parade at Modi's personal invitation is also the latest revival in a roller-coaster relationship between the two largest democracies that just a year ago was in tatters. "I'd like to think the stars are aligned to finally realise the vision (of) India and America as true global partners," Obama said in an interview with , a weekly magazine, published on Friday.

Aides say the two men bonded in Washington in September when Obama took Modi to the memorial of Martin Luther King Jnr, whose rights struggle was inspired by Mahatma Gandhi.

The "chemistry" aides describe is striking because Modi's politics is considerably to the right of Obama's and because he was banned from visiting the United States for nearly a decade after deadly Hindu-Muslim riots in a state he governed.

India has pushed back against China elsewhere in the region since Modi took office in May, improving ties with Japan and Vietnam, both locked in territorial disputes with Beijing.

New Delhi has also moved quickly to improve relations with Sri Lanka.

The new robust diplomacy, which Modi calls "Act East", is being regarded warmly in Washington, which has been nudging India for years to dovetail with its strategic pivot towards the region.

Watch: Obama, Modi announce nuclear breakthrough after talks

Issues of importance at US-India summit

Strategic importance: India’s size, location, fast-growing economy and potential as a democratic counterbalance to China makes the South Asian nation an increasingly important element of US military and commercial strategy. India wants greater cooperation on terrorism and access to high-technology goods for civilian and military use.

Defence: The United States overtook Russia as the biggest weapons supplier to India, the Indian government said in August. India is the world’s biggest weapons importer. US officials confidently predict deals will be unveiled on the trip, including possibly joint production of Raven drones and systems for Lockheed’s C-130 transport planes.

Civil nuclear: US and Indian officials are unblocking billions of dollars of potential trade in nuclear energy.

Renewable energy: India wants US companies to help lead investments of US$100 billion in renewable energy. Modi promised to help renewable energy companies overcome entry to the Indian market during his trip to Washington last year.

Economic ties: Modi and Obama last year targeted a five-fold increase in annual trade to US$500 billion. But US business leaders have been frustrated by limits on their access to the Indian market and battles over intellectual property protection.

Reuters