The agreement, hailed as historic by leaders of both countries, would help enable a big leap in bilateral cooperation.

Emerging from talks that lasted 45 minutes, Prime Minister Lee Hsien Loong and Prime Minister Manmohan Singh inked the 739-page Comprehensive Economic Cooperation Agreement (Ceca) at New Delhi's Hyderabad House, the former Nizam's palace.

"Ceca is a historic agreement which will take our economic relationship to a new plane," Mr Singh told The Straits Times in an interview. "It opens doors for a quantum jump in trade and investment flows between us."

Speaking at a banquet hosted by Mr Singh in his honour later in the day, Mr Lee noted that India is undergoing its biggest transformation in its history and Singapore is keen to engage this New India.

He said the reforms initiated by Mr Singh as finance minister in 1991 are unshackling India from bureaucratic controls and opening it up to the world economy.

While on his last trip here, he had witnessed the vibrancy, dynamism and confidence of Indians, this time, he could sense in them a growing confidence and optimism about the future.