President Bush says relations between India and the United States have greatly improved after the end of the Cold War.
He said the two countries are working together to spread democracy in the world.
President Bush was speaking at the Asia Society in Washington just days before he begins his visit to India and Pakistan.
He said both Washington and New Delhi realize that terrorism can only be combated if the ideology of hatred is replaced with the ideology of hope.
President Bush rejected criticism in the United States about outsourcing jobs to India. He said he does not want to adopt the policy of protectionism and that India's 300 million middle class buys American appliances which helps the US economy.
He said he understands the energy needs of India's growing economy. He said the civilian nuclear deal he has reached with India also brings India within the international norms followed by other nuclear powers.