"I think we got far more out of that deal with India, whether it is on the commercial or the economic side," Hagel, a two-time Republican Senator from Nebraska and one of the most vocal critics of President George W Bush's Iraq policy, said in response to a question at the Asia Society in New York on Monday.

The interaction with the Senator was part of the Society's series, 'American Political Leaders on the Future of US relations with Asia.'

Noting that the US has made a deal with India for the latter's nuclear power development, Hagel felt in part it is a "business" decision.

"But it is also a strategic decision to line up India against China... I think this is a formal way," he said.

Hagel said in order to conclude the deal the US had to pay the price on nuclear non-proliferation and had to agree that the US would not require inspection of India's military nuclear facilities.

"I think it is imperfect (and) it has its downside.... but I think that (while) there are really big issues that you deal with where it is a black and white option, foreign policy is never that way," he said in response to a question from Leslie Gelb, president emeritus of the Council on Foreign Relations, who moderated the half-hour event.

"A nation's interest is rarely defined that way... You have to adjust where you think your interests are best served and where you think it comes down in your long-term interest," Hagel, a Republican candidate for the 2008 US presidential election, said.

He argued that India was not going to unwind its nuclear capability even if Washington did not ink the deal with New Delhi.

"I think we got far more out of that deal with India. It also gives us for the first time some real ability to work on the inside with the Indians in their nuclear areas. It also gives us some leverage that we did not have," he said.

He asked the 60-odd members of the audience if there was any option (for the US) as far as India's nuclear capability was concerned if Washington did not do the deal.

"(Do you think) the Indians were going to give up their nuclear capability if we did not do the deal? I do not think so. As I said the options are not really perfect options, but I think what we got out of that deal is a closer engagement with India, which clearly is in our interest," Hagel, who won two medals for courage in the Vietnam War, said.

To another question regarding Pakistan's concern on the nuclear deal he said he did not think that not doing the deal would have been any better.

"I talked to President (Pervez) Musharraf and also to Prime Minister (Manmohan) Singh last spring when I was there. I understand Pakistan is concerned about the deal and we have to deal with this. But I do not think not doing the deal with India somehow would have improved the situation with Pakistan," he said.

The Republican Senator, described by Gelb as "a national interest Senator, who puts the country above party," also briefly touched on American foreign policy on China, Iraq and Iran, saying that one of the seven priorities for American foreign policy is getting the relationship with China right.

"I think the direction in which we are moving with the Chinese is responsible. There will be differences but we can move on the basis of a common denominator of interests and work from that foundation of mutual self-respect," Hagel, a member of the Senate Foreign Relations Committee, said.

But he cautioned that the US has to be careful so significant differences between the two countries do not lead to enmity. "We need not let that happen. We should be competitors. But we need not be enemies," he said.