Washington, Jun 14 (IANS): With the looming shadow of Iran oil sanctions removed, India and the United States made substantial progress at their third strategic dialogue, including a breakthrough on the stalled civil nuclear deal.

Though the agreement between US-based Westinghouse and the Nuclear Power Corporation of India Ltd for preliminary site development for future construction of nuclear power plants in Gujarat came outside the conference room, it set the tone of discussions at the dialogue.

Both Indian External Affairs Minister S.M. Krishna and US Secretary of State Hillary, who co-chaired the wide-ranging dialogue, welcomed the removal of a major hurdle in the implementation of the landmark India-US civil nuclear deal stalled over US concerns over India's tough nuclear liability law.

"It should put at rest some of the interpretations and some of the confusion" over the nuclear deal to allow "nuclear commerce to expand itself," said Krishna hoping more Indian and American companies will come forward to invest in India.

Clinton called it a "significant step toward the fulfillment of our landmark civil nuclear cooperation agreement" and said she looked forward to additional deals with other American companies, including General Electric-Hitachi.

But she said "there is still a lot of work to be done, including understanding the implications of nuclear liability legislation" that has kept US companies away though the 2008 agreement had reserved two sites for American companies.

Another key outcome was an agreement to hold a trilateral dialogue with Afghanistan, seen as a recognition of India's constructive role in the trouble torn nation, with Clinton welcoming India's hosting of the Delhi Summit on Investment in Afghanistan on June 28 in New Delhi.

Referring to the exemption given to India from Iran oil sanctions, Clinton also appreciated steps taken by India "to diversify its sources of imported crude by reducing purchases of Iranian oil."

But Krishna suggested at a press conference later that Iran issue only "came up in passing" and the US "fully understood India's position" and its oil imports from Iran which "has been one of the important sources" for India had been "coming down because of the "international situation."

There was no one single overarching outcome of the dialogue, but a 13 point joint statement listing progress in seven key areas took note of "the remarkable expansion and growth of the bilateral relationship since the inaugural Strategic Dialogue in 2010."

"They committed to further broaden and deepen the US-India global strategic partnership and charted a vision for the future, centred on promoting shared prosperity, peace and stability," it said.

Recognizing the importance of people to people contacts, the statement said "leaders of both countries have placed promotion of closer ties between the people, private collaborations and public-private partnerships at the centre of the Strategic Dialogue."

The seven key areas listed encompassed: strategic cooperation; Counter-terrorism, Intelligence, Homeland Security and Cyber Security; Energy and Climate Change; Education and Development; Economic, Trade and Agriculture; Science & Technology, Health and Innovation; Global Partnership; and People -to-people ties.

The next meeting of the Strategic Dialogue is planned in New Delhi in 2013.