In a major diplomatic initiative, India on Friday unveiled $500 million for a host of developmental projects for Myanmar and decided to expand security cooperation with the energy-rich Southeast Asian nation that also enjoys close ties with Beijing.

Prime Minister Manmohan Singh held talks with Myanmar President U. Thein Sein on a host of issues, including the intensification of economic, energy and security cooperation between the two countries.

Thein Sein, who is on his maiden visit to India since the election of a civilian government early this year, was accorded a ceremonial reception at Rashtrapati Bhavan before he sat down for talks with Manmohan Singh.

Marking a major upsurge in bilateral ties, Manmohan Singh announced a $500 million line-of-credit to Myanmar for a host of projects, including irrigation projects.

This is in addition to nearly $300 million India had extended earlier for several infrastructural projects, including the development of railways, transport, power transmission lines and oil refinery.

India also announced a raft of initiatives to expand its involvement in capacity building that include the setting up of an Advanced Centre for Agricultural Research and Education (ACARE) in Yezin, a Rice Bio Park and an IT training institute in Mandalay.

Significantly, Manmohan Singh lauded Thein Sein on steps taken by him to spur 'the transition towards democratic government' and offered all necessary assistance in further strengthening this democratic transition in an inclusive and broadbased manner.

"The visit represented the first state visit to India following the swearing-in of a new government in Myanmar in March 2011 that marks welcome progress in moving towards an open and democratic framework," said a joint statement after the talks.

In an important step, the two sides agreed on 'enhancing effective cooperation and coordination between the security forces of the two countries in tackling the deadly menace of insurgency and terrorism,' the joint statement said.

Thein Sein, who began his four-day state visit to India Wednesday, assured India that Myanmarese territory would not be allowed for insurgent activities directed against India.

"The two leaders reiterated the assurance that the territory of either would not be allowed for activities inimical to the other and resolved not to allow their respective territory to be used for training, sanctuary and other operations by terrorist and insurgent organizations and their operatives," said the joint statement.

Bolstering border management mechanisms figured prominently in delegation-level talks.

Stressing their 'unequivocal and uncompromising position against terrorism,' the two sides decided to bolster institutional mechanisms for sharing of intelligence to combat the menace of insurgency, arms smuggling and drug trafficking.

The two leaders also discussed a swathe of infrastructure projects that will enhance connectivity between the Southeast Asian nation and India's northeastern states.

The two sides decided to speed up the construction of India-aided $120 million Sittwe deep water port with a view to making it operational by June 2013.

The port, when completed, will act as a trade gateway for India's northeastern states to Southeast Asia by allowing cargo vessels from India's landlocked state Mizoram to navigate the the Kaladan River and connects them to Myanmar and the East Asia region.

Voicing satisfaction at the implementation of the Kaladan Multi-modal Transit Transport Project, the two sides decided to start the road component of the project started at the earliest.

They also agreed to to open an additional border trade point on the India-Myanmar border to allow for the smooth flow of goods generated by the Kaladan Project.

After the talks, the two sides signed a pact on upgradation of the Yangon Children's Hospital and Sittwe General Hospital. Another pact was signed for programme of cooperation in science & technology from 2012 to 2015.