Australia will be at the centre of India's strategy to build its economy and ensure peace in the Asia-Pacific region.
Prime Minister Narendra Modi, the first Indian leader to visit Australia in 28 years, delivered a colourful and much-applauded speech to federal parliament shortly after a meeting with Prime Minister Tony Abbott on Tuesday.
The two leaders agreed to fast-track free trade negotiations in a bid to sign a deal by the end of 2015, and reached an agreement on greater security co-operation.
"Australia will not be at the periphery of our vision, but at the centre of our thoughts," Mr Modi said.
A day after Chinese President Xi Jinping addressed parliament, Mr Abbott praised India for its emergence as a democratic superpower in the region.
"This is why people now speak of the Indo-Pacific as the focus of the world's economic dynamism," Mr Abbott said.
India's GDP is still only half of China's, and Australia's business with the country totalled only $15 billion in the past year.
But it has strong economic prospects and its population, now 1.25 billion, is expected to overtake China's in the coming decades.
Mr Modi said Australia would have a growing role in boosting prosperity and security.
"We see Australia as a vital partner in India's quest for progress and prosperity. There are few countries in the world where we see so much synergy as we do in Australia," he said.
As officials finalised work on safeguards for Australian uranium exports, the Indian leader said any economic growth needed to ensure it did not impact on the environment or climate.
"(We need) energy that does not cause our glaciers to melt, clean coal and gas, renewable energy, a fuel for nuclear power, cities that are more sustainable and liveable," he said.
"Australia has immense opportunities to participate in India's progress."
The key to prosperity lay in a peaceful region, which would involve greater defence and intelligence co-operation between the two countries.
Mr Modi called for a comprehensive global strategy for dealing with terrorism.
As he was the third world leader to address parliament in five days, Mr Modi joked with MPs and senators that it was "prime minister Abbott's way of shirt-fronting you".
Mr Abbott said in his introductory remarks there were "two can-do prime ministers" in the chamber.
"By the end of next year we will have a free trade deal with what is potentially the world's largest market," Mr Abbott said.
One of those greeted in the chamber by Mr Modi was Australia's first federal member of Indian ancestry, Labor senator Lisa Singh.
Under the security deal, the two countries will conduct regular defence ministers meetings, military exercises and work more closely on counter-terrorism.
Mr Modi, who was in Australia for the G20 summit last weekend, also laid a wreath at the Australian War Memorial.
He flew to Melbourne in the afternoon to address the Australia India Business Council and for a dinner at the MCG hosted by Mr Abbott.
