India and Bangladesh have agreed to join forces against terrorism and to correct trade imbalances tilted heavily in India's favor.
The agreement came at a meeting in New Delhi between visiting Bangladeshi Prime Minister Khaleda Zia and her Indian counterpart Manmohan Singh on the second day of the three-day visit.
The two sides also signed an agreement aimed at expanding trade ties and another on preventing illicit trafficking in narcotics and other illegal drugs.
An Indian spokesman said the two leaders also pledged to implement a South Asia Free Trade Agreement between the two neighbors as early as possible and decided to open a rail link between the two countries. He said the two leaders also discussed disputes over sharing water from common rivers.
Mrs. Zia is on her first visit to India since taking office in 2001.