India PM Manmohan Singh in historic Burma visit
Manmohan Singh has held talks with Burmese President Thein Sein as he makes the first official visit to Burma by an Indian prime minister since 1987.
The two sides signed 12 agreements to strengthen trade and diplomatic ties.
During his three-day trip, Mr Singh will meet opposition leader Aung San Suu Kyi, whose mother once served as Burma's ambassador to India.
The two nations share a 1,600km (1,000 mile) border, but relations have often been uneasy.
On Monday, they signed agreements on border area development, air services, cultural exchanges, a $500m credit line between India's Export-Import Bank and Myanmar [Burma] Foreign Trade bank, and establishment of a joint trade and investment forum, the BBC's Sanjoy Majumder reports from the Burmese capital, Nay Pyi Taw.
Delhi cold-shouldered Burma's military rulers during the 1990s, infuriating the generals by openly supporting Ms Suu Kyi.
But Mr Singh, who arrived in the Burmese capital on Sunday, has overseen a dramatic turnaround in Delhi's policy, and hosted former ruler Than Shwe on a state visit in 2010.
Earlier, on his arrival in Burma, Mr Singh said: "I am coming here after 25 years when the last prime minister of India visited here. We have centuries-old ties of religion, culture and civilisation with the people of Myanmar.''
He had earlier said he wanted "stronger trade and investment links, development of border areas, improving connectivity between our two countries and building capacity and human resources".
Mr Singh is the latest in a series of leaders to visit Burma as it embarks on a process of reform under the new government.
India is particularly keen on gaining access to Burma's rich gas fields, many of them still unexploited.
But it will have to stave off competition from China as well as other countries in Asia and the West which are also pouring in money, our correspondent says.
India has already signed a number of deals for the exploitation of Burma's vast reserves of natural gas, and Indian firms are building ports and other infrastructure projects in Burma.
A high-powered business delegation forms part of Mr Singh's entourage, including telecoms tycoon Sunil Bharti Mittal, chairman of mobile giant Bharti Airtel.
Last week, India made a symbolic announcement that transport links would be improved, including the first official bus route across the border.
India is now Burma's third biggest export market, behind China and Thailand.
But China still dominates oil and gas exploration in Burma and is involved in the construction of roads, pipelines and port facilities.
Analysts say India is desperate to counteract the influence of China in the region, and Mr Singh will be keen to stress the close cultural and historical ties between the two countries.
Both sides will also focus on issues of security, particularly along their border which is home to armed insurgent groups as well as drug traffickers, says our correspondent.