Toyako, Japan - US President George W Bush and Indian Prime Minister Manmohan Singh signalled Wednesday that they were making progress on a controversial agreement to sell US nuclear technology to India.

"We talked about the India-US nuclear deal, and how important that is for our respective countries," Bush told reporters.

"We talked about common opportunities, world problems, and we did it in a spirit of respect. And it was easy for me to do because I respect the prime minister a lot. I also respect India a lot," Bush added.

Bush and Singh met on the sidelines of a Group of Eight summit in Japan.

Singh said the relationship between their two countries had "never been in such good shape as it is today," highlighting "progress in nuclear cooperation."

The US wants to sell its civilian nuclear technology and nuclear fuel to India in exchange for international safeguards on India's civilian nuclear reactors.

But the deal is fiercely opposed by India's communists, who are in Singh's ruling government coalition, and who argue that it would compromise India's strategic sovereignty and make the country a stooge of "US imperialism."

Their threat to pull out of Singh's ruling United Progressive Alliance would leave the government 46 seats short of its parliamentary majority.

The US-India nuclear deal was first announced in 2005.

Other topics up for discussion between Bush and Singh in Japan included ways to protect the environment, educational exchanges and free trade.

"We talked about free trade, the Doha Round, and how important it is that nations such as India and the United States find common ground to make sure protectionist sentiments don't wall us off from the rest of the world," Bush said. (dpa)