New Delhi: US President Barack Obama on Sunday set the tone for the strategic leg of his India visit by saying his country will not intervene to resolve tensions between Pakistan and India, ahead of a meeting with Prime Minister Manmohan Singh in New Delhi.

Singh and his wife departed from protocol to personally receive Obama at the New Delhi airport, a signal of growing warmth between the two nations once described as estranged democracies. Singh later hosted a private dinner at his residence for the President.

Time out: US President Barack Obama and First Lady Michelle Obama with the children of workers who carried out the renovation work at Humayun’s Tomb, during a visit to the monument on Sunday. PTI

Obama, the third US president to visit India inside a decade, arrived in Mumbai on Saturday to begin the longest foreign visit of his two-year-old presidency. He will depart on Tuesday.

Before leaving for New Delhi, Obama interacted with university students in Mumbai on Sunday, saying the US won’t step in to resolve problems between India and Pakistan, including the six-decade-old Kashmir dispute that has triggered two wars between the neighbours.

Obama described Pakistan as a “strategically important country, not just for the United States but for the world", but balanced the praise by saying Islamabad’s battle against extremism was making slow progress.

“I think that the Pakistani government understands the threat that exists within its own borders... Now, progress is not as quick as we would like," he said, referring to extremists that the Pakistan military was fighting, particularly in the country’s mountainous north-west, close to the Afghan border.

“The country that has the biggest stakes in Pakistan’s success is India... My hope is that over time, trust develops between the two countries, that dialogue begins perhaps on less controversial issues...and that over time, there is a recognition that India and Pakistan can live side by side in peace," Obama said.

He added that the US can be a friend and partner in the process, but it won’t impose itself on India and Pakistan. “Utimately, India and Pakistan have to arrive at their own understanding on how the relationship evolves."

His statement was in line with India’s position. Islamabad has for long wanted the US to mediate between India and Pakistan on the Kashmir dispute, but New Delhi is vehemently against such intervention.

India called off a four-year peace process with Pakistan after a terror attack in Mumbai in November 2008, which New Delhi blamed on the Pakistan-based terrorist group Lashkar-e-Taiba (LeT). One of Obama’s first engagements after landing in Mumbai was to pay homage to the 166 victims of the 60-hour siege, which included six Americans.

With converging strategic interests, India and the US are on the same page on a number of issues, an Indian offical said last week. However, the two nations continue to differ on some other subjects, such as US support to Pakistan and the future of US engagement in Afghanistan, where it is fighting a war against the Taliban.

India would like a strong statement against Pakistan for fostering groups such as the LeT, which target Indian interests. The LeT, with links to the global al Qaeda terror network, was designated “a foreign terrorist organization" in December 2001. On the eve of Obama’s departure from Washington on Thursday, the US treasury departament slapped sanctions against the LeT and another group, the Jaish-e-Mohammed.

However, the US banks heavily on Pakistan in its fight against the Taliban, and has been careful to strike a balance.

India is wary of a $2.3 billion (Rs 10,189 crore) package for the Pakistani army unveiled by the US in October. Washington says the money will aid Pakistan’s counter-insurgency operations against the Taliban, but New Delhi fears the Pakistan army may use it to boost anti-India capabilities.

On Afghanistan, Obama said the US “will be drawing down our troop levels but we will not be removing all our troops", a process expected to start in July.

But the “pace of drawing down is going to be determined in part by military issues; it is also going to be determined by politics", he said, in reference to hopes that military operations against the Taliban would be a success in the face of waning support in the US for the decade-long war.

New Delhi wants US forces to stay in Afghanistan until the Taliban, which it views as anti-India, are defeated.

“A stable Afghanistan is achieveable," Obama said. “India’s ($1.3 billion) investment in development in Afghanistan is appreciated. Pakistan has to be a partner in this process. In fact, all countries in this region have to be a partner in this. We don’t think we can do this alone."

India would also like the US to endorse its candidature for a permanent seat in the UN Security Council during the Obama visit, in line with its rising global profile.

Turning to economic issues, the president noted that America’s economic dominance was no longer undisputed. The “incredible rise of India, China and Brazil" meant that even though the US remained the largest economy and the largest market, it had to be ready to face competition.

“We want access to your market—we think we have good products to sell, you think you guys have good products to sell us. This can be a win-win situation," Obama said.

On Saturday, he had urged India to remove investment restrictions in areas such as retail, telecommunications and agriculture, while announcing the removal of embargoes on the export of sensitive technology to India—a long-standing demand of the Indian government.

Also on Saturday, Obama had announced that Indian and US companies had struck 20 trade deals worth $10 billion, which would help create nearly 54,000 jobs in the US. The President’s visit has come on the heels of major losses for his Democratic party in the 2 November mid-term elections, which were dominated by concerns over a sluggish US economy and high levels of unemployment.

The US’ commercial pacts with India, Asia’s third largest economy, included a $7.7 billion contract for Boeing Co. to supply 30 of its B737 aircraft to private Indian carrier SpiceJet Ltd and a preliminary accord on the sale of 10 C-17 Globemaster military transport aircraft potentially worth $4 billion.