Britain has agreed a five-year partnership with India to help develop the cities of Amravati, Indore and Pune, Prime Minister David Cameron has announced.
The deal was one of a raft of agreements sealed during the visit to London of Indian prime minister Narendra Modi, which Mr Cameron said provided "a real opportunity to open a new chapter in the relationship between our two countries" and develop "a more ambitious modern partnership" on an economic, defence and global level.
Speaking alongside Mr Modi at the Foreign Office following talks at 10 Downing Street, Mr Cameron said that British and Indian companies had announced new collaborations worth a total of more than £9 billion during the visit.
And he said he wanted Britain to become India's "number one partner" in raising finance for Mr Modi's plan to create 100 "smart cities" across the country, with the City of London establishing itself as the world's centre for trading in India's rupee currency.
This process was beginning with the issuing of £1 billion worth of bonds in London, including the first-ever government-backed rupee-denominated to be issued internationally, said Mr Cameron.
Amravati, Indore and Pune are three of the cities taking part in Mr Modi's smart development programme, and Mr Cameron said he hoped British firms would get a share of the planning, design and construction work involved. Indian and British scientists will work together in a new £10 million research collaboration into low-cost, low-carbon energy sources for the smart cities.
Britain is already the largest investor in India among G20 countries while India invests more in the UK than it does in the rest of the EU combined.
Greeting Mr Modi at Downing Street, Mr Cameron told his counterpart - the first Indian premier to visit the UK for a decade - that "relations between our peoples are already very strong" and he hoped that other links could be improved.
Rather than pulling into Downing Street in his convoy, Mr Modi was brought in on foot via the Foreign Office, apparently to avoid noisy protests taking place outside.
Mr Modi is also due to meet the Queen at Buckingham Palace, deliver an address to Parliament and attend an event for members of the UK's Indian community at Wembley Stadium.
But while he is receiving a rapturous welcome in some quarters, Mr Modi - who won the world's biggest democratic mandate in elections last year - is also coming under fire from critics.
A crowd of around a hundred protesters gathered outside Downing Street, chanting noisily and holding placards.
Messages on the banners included "Modi not welcome", "Stop religious persecution", and "Remove illegal blockade in Nepal".
A police cordon and vans were in position to prevent them disrupting access to the street. Roads around Westminster were closed off and helicopters circled overhead.
More than 200 writers, including Ian McEwan, Salman Rushdie and Val McDermid, have written an open letter to the Prime Minister urging him to raise concerns about freedom of expression in India during his talks with Mr Modi.
Mr Cameron said: "We want to forge a more ambitious modern partnership, harnessing our strengths and working together for the long term to help shape our fortunes at home and abroad in the 21st century.
"As leaders, we share similar priorities - to create jobs and opportunities for all, to protect our people from terrorism and to tackle global challenges like climate change."
Mr Modi said India's relationship with Britain was "of immense importance to us".