Landing in the overcast capital at around 9.40 am on Sunday morning, US President Barack Obama was greeted with a warm hug by Prime Minister Narendra Modi who broke protocol to receive the visiting dignitary at the airport, addressed him by his first name and later prepared tea for him after their official-level talks, symbolising a defining moment in the Indo-US partnership that culminated in the two countries striking a breakthrough over the nuclear agreement stuck in a logjam since 2008.
"Prime Minister Modi, thank you for hosting me, including our 'chai pe charcha'.
"We need more of those in the White House. But even as this visit is rich with symbolism, we made substantive progress," the US President said during his joint media interaction.
FULL COVERAGE:Barack Obama in India
"Barack and I have forged a friendship. There is openness when we talk on the phone and we also crack jokes," Modi said.
"This chemistry has brought Barack closer to me but also brought the people of India and America closer," he added.
"I'm fairly new in this area but relations between countries depends less on full stops, commas, and more on the personal chemistry between the leaders. I think this chemistry is very important and will only grow," he added.
This is the first time an American leader has visited India twice during his presidency. Obama is also the first to be invited to attend the Republic Day celebrations, which is also an occasion for India to display its military might.
Modi, decked in gold kurta, was at the airport to greet the Obamas with an embrace.
The US President returned the gesture and patted the prime minister on the back several times.
Obama's limousine was later escorted into the forecourt of the Rashtrapati Bhavan by President's guards.
He was welcomed with a booming 21-gun salute and inspected an honour guard.
In his opening remarks at the joint media interaction later, Modi disclosed that on the nuclear deal the two countries are moving towards commercial cooperation, consistent with our law, our international obligations and technical and commercial viability.
Modi said that civil nuclear agreement was the centrepiece of the transformed relationship, which demonstrated new trust.
"It also created new economic opportunities and expanded our option for clean energy. In the course of the past four months, we have worked with a sense of purpose to move it forward."
Obama called it a "breakthrough" as the two sides resolved key hurdles regarding liability of suppliers of nuclear reactors in the event of an accident and the tracking of fuel supplied by the US and other countries for its proposed nuclear plants.
The US had been insisting on a shied for US-based companies that India has been resisting.
Other than the nuclear deal, the two leaders also discussed better cooperation in the areas of defence, terrorism, trade and social security, even as the beginning of new ties between the countries was visible in the manner in which the two heads of states shared camaraderie.
After the official discussions followed by lunch, Modi and Obama took a stroll in the Hyderabad House lawns.
"I see new excitement and confidence in this relationship. I see renewed energy in our engagement. I thank you for your leadership and for setting the tone last September," Obama said.
The deal on nuclear cooperation that was stuck for almost seven years was signed during the term of former PM Manmohan Singh in 2008.
Foreign Secretary Sujata Singh said that assurances were given to the US on both the liability clause and tracking issues.
"The liability provisions and administrative arrangements finalised under the 123 act (tracking) are consistent with our bilateral legal arrangements and contracts and IAEA safeguards and international laws and obligations," Singh said.
The White House said that the understanding on the civil nuclear programme resolves the US concerns on both tracking and liability. "In our judgement, the Indians have moved sufficiently on these issues to give us assurances," Ben Rhodes, US Deputy National Security Adviser told US journalists.
US President Barack Obama with US First Lady Michelle Obama
On defence and security, both countries have agreed on four projects under the Defence Technology Transfer Initiative (DTTI) including exploration of development of advanced jets in India.
On terrorism, Prime Minister Modi said it remains a principal global threat taking on a new character even as existing challenges persist. "We agreed that we need a comprehensive global strategy and approach to combat with it.
mosimageThere should be no distinction between the terrorist groups. Every country must fulfil its commitments to eliminate terrorist's safe havens and bring terrorists to justice," he said.
Modi added the two countries will deepen their bilateral security cooperation against terrorist groups and further enhance counter-terrorism capabilities including in the area of technology. Obama said both the countries are going to be "strong and reliable partners for people of Afghanistan". The two leaders said they have decided to scale up their economic relationship.