Bush spent much of his four hour visit chatting with farmers, weavers and women volunteers from self-help groups at an agricultural university, and interacting with young entrepreneurs at the Indian School of Business.

Police said five people were injured in clashes between riot police and Muslims opposed to his visit outside Hyderabad's Mecca Mosque.

The clashes occurred after Friday prayers ended and some among the congregation of about 5,000 began throwing stones at police.

Police wielding batons pushed the crowd back into the mosque, from where many continued throwing stones, shoes and plastic bottles. Some protestors also burnt an effigy of Bush on the street.

Two separate protests earlier drew a combined crowd of about 5,000, organisers and witnesses said.

No shops opened in the business centre after Muslim leaders called for the city to be brought to a standstill in protest at Bush's visit.

Police overnight slapped a ban on the flying of kites and balloons, which Muslim activists had said they would fly bearing anti-Bush slogans as part of their protest against US policies in the Middle East.

Tight security ensured the protestors came nowhere the president, who in his interaction later with the businesses students hailed the nuclear deal he and Singh sealed during talks in New Delhi on Thursday.

"Yesterday was a way to put the Cold War behind us (and) move forward as strategic partners. I want to congratulate your prime minister and the Indian government for working with me and our government to show the world what is possible when people come together and think strategically," Bush said.

The deal, the highlight of Bush's three-day trip to India, commits Washington to seek approval from the US Congress and the 45-nation Nuclear Suppliers Group to share their civilian nuclear technology with India.

Bush also ruled out protectionist measures to address domestic concerns on outsourcing to India and said he favoured easy access for Indian students to American universities and schools.

"I have taken a position, the US will reject protectionism. We won't fear competition. We welcome competition," he told the students.

Andhra Pradesh state supplies nearly a quarter of the Indian technology professionals who work in the United States, according to government figures.

After Bangalore, Hyderabad is India's number two exporter of software, mainly to the United States, and is a pillar of the country's booming multi-billion dollar technology and outsourcing services industries.

The Press Trust of India news agency quoted Bush as acknowledging that people lose jobs as a result of globalisation.

"Losing a job is painful. But the fundamental question is how does the government react," he told the students, adding that one way was to resort to protectionist laws and the other was to educate people so that they could find new jobs.

The president was scheduled to deliver a speech to political and business leaders late Friday at a 16th-century Mughal fort in New Delhi before departing for neighbouring Pakistan.