Seeking to give a new dimension to bilateral ties, Prime Minister Manmohan Singh [Images] Tuesday said "a strong and prosperous" Bangladesh is in the interest of India and the region.

"A strong and prosperous Bangladesh is in the interest of India, South Asia and the Asian region as a whole," Dr Singh told reporters after a ceremonial reception was accorded to visiting Bangladesh Prime Minister Begum Khaleda Zia on the forecourt of Rashtrapati Bhavan [Images].

"She (Zia) is an honoured guest and we have intimate ties of friendship with Bangladesh," he said adding, the two countries would discuss all bilateral issues.

Khaleda Zia, after receiving a ceremonial guard of honour, told reporters that she had come with an "open mind" and would "discuss everything".

Earlier, she was received at the Rashtrapati Bhavan by Dr Singh who was introduced to members of her delegation.

Khaleda Zia, who arrived in Delhi Monday on a three-day visit, has expressed hope that conditions would be created for "perceptible improvement" in bilateral ties to usher in a "new phase" in friendship and cooperation.

The two countries are likely to sign three pacts, including Double Tax Avoidance Agreement and Investment Protection Agreement.

During the prime ministerial-level talks, India is likely to seek Dhaka's cooperation in ending terrorism emanating from Bangladesh, besides issue of illegal immigration.