India rolled out the red carpet Friday for Myanmar President Thein Sein, on a visit that followed his government's release of 200 political detainees -- the latest in a series of reformist moves.

The former general, who arrived in India on Wednesday and spent two days touring Buddhist pilgrimage sites, was given a full state welcome in New Delhi for the official leg of his three-day trip.

He then began a round of extensive talks with Prime Minister Manmohan Singh.

The visit coincided with Myanmar's release on Wednesday of nearly 200 political prisoners, in another tentative sign of change in the authoritarian state after decades of military rule and repression.

Thein Sein has surprised critics by signalling a series of political reforms since taking power in a controversial election last November, and has held direct talks with pro-democracy leader Aung San Suu Kyi.

In a rare concession to public opinion, his nominally civilian government last month suspended construction of a controversial mega-dam, risking the anger of traditional ally China, which is backing the project.

The prisoner release was welcomed by the United States and UN Secretary General Ban Ki-moon, although both called on the government to release all the roughly 2,000 political detainees still behind bars.

"We see it as an important step that responds to the aspirations of the Burmese people," State Department spokeswoman Victoria Nuland said.

"We have not yet seen a complete list. We do believe that there is still a large number of political prisoners in prison, and we call for all of them to be released," she added.

Observers say the releases and the overtures to Suu Kyi signal Myanmar's desire to end its long international isolation, backed by trade and financial sanctions.

India began engaging the Myanmar junta in the mid-1990s on security and energy issues and as a counter to China's growing strategic influence in the Southeast Asian nation, formerly called Burma.

The policy drew international criticism, with US President Barack Obama chiding New Delhi during a visit to India last year for not speaking out over human rights abuses in Myanmar.

New Delhi feels vindicated by Thein Sein's recent inititatives and, during their talks, the Indian premier welcomed his "ongoing efforts at political, economic and social reform," according to a joint statement.

India also sees the stand on the dam project as a sign that Myanmar is making room for other allies apart from China -- India's main regional rival.

"What remains to be seen is whether these recent signs of opening signal a greater degree of economic liberalisation," said G. Parthasarathy, a former Indian ambassador to Myanmar.

An Indian foreign ministry official insisted there was room for both China and India to play a role in Myanmar's future development.

"Relationships between countries are not a zero-sum-game," the official argued.

Beijing has long helped shield Myanmar from international opprobrium and the impact of western sanctions with trade ties, arms sales and through its position as a veto-wielding permanent member of the UN Security Council.

Indian trade with Myanmar stood at $1.2 billion last year, far short of the $4.4 billion between Myanmar and China.