One of the enduring legacies of former President George W. Bush is the relationship he forged between the United States and India. That effort, driven by moral and geostrategic imperatives, enabled two of the world's largest democracies to overcome decades of rancor.

There were fears that this initiative might not survive the transition to the Obama administration, but those concerns appear to have been put to rest, at least if this week's visit to India by U.S. Secretary of State Hillary Clinton is any indication. Mrs. Clinton's trip produced a raft of agreements that allow the two countries to broaden and deepen their budding partnership. But it also showed the divisions between them and the potential limits on their relationship.

Arguing that the world's two largest democracies were natural partners, Mr. Bush bulldozed objections to a relationship that had been blocked by Delhi's determination to join the club of nuclear nations and its objection to the global nonproliferation regime. If shared values were not reason enough for the two to work together, there was the siren song of economic opportunity as well as shared suspicions of China.

Together, they overcame the enmities engendered by the U.S. refusal to recognize India's nuclear weapons program. Mr. Bush's determination to conclude a U.S.-India civilian nuclear cooperation agreement, in the face of considerable opposition at home and abroad, convinced his Indian interlocutors of his sincerity and his good intentions.

In her first trip to India as U.S. secretary of state, Mrs. Clinton added to the gains of the Bush years. The two countries reached a technical agreement on U.S. military sales to India; Delhi picked two sites where U.S. companies will build nuclear power plants; and they struck several other smaller deals. Perhaps most significant, they agreed to launch a strategic dialogue that would cover a wide range of issues and include a broad cross section of participants. By every standard, the trip was a success, elevating the U.S.-India relationship to new levels.

Delhi's agreement to let the U.S. monitor the "end use" of military equipment and technology sold to India — to ensure that it is not diverted — opens the door to the sale of fighter jets that could be worth as much as $10 billion. Selecting the nuclear sites is another step toward the sale of U.S. nuclear technology to India. That could be worth another $10 billion — but progress depends on India's agreement to shield U.S. manufacturers from liability in excess of $450 million in the event of an accident. Agreements were also signed to allow the use of U.S. parts on Indian satellite launch vehicles, and the two governments set up a $30 million fund for joint science and technology projects.

The decision to establish a strategic dialogue is a symbolic but important development. Washington has only characterized dialogues with allies as "strategic" — a point of no small friction in relations with China. The decision to launch a Cabinet-level strategic dialogue with Delhi — coming on the heels of the Obama administration's move to "upgrade" relations with Beijing with the first "Strategic and Economic Dialogue" commencing in Washington next Monday — is a clear signal of the importance that the U.S. attaches to ties with India. Equally symbolic is the invitation of Indian Prime Minister Manmohan Singh to the new administration to make its first state visit in November.

The improvement in relations does not just reflect a change in U.S. attitude. The win by Mr. Singh's coalition in elections in May allowed him to jettison parties that had jealously guarded India's nonaligned status and opposed better relations with the U.S.

Yet, for all the progress, significant obstacles remain. The two governments remain deeply divided when it comes to dealing with climate change. The U.S. continues to insist that India, like China, do more to fight global warning. Delhi, like Beijing, is unwilling to pay to solve a problem that is not of its making — especially when doing so will entail significant costs. Mrs. Clinton countered that the U.S. government does not want to undermine India's efforts to eradicate poverty: "We also believe that there is a way to eradicate poverty and develop sustainably that will lower significantly the carbon footprint."

Iran also divides the two. The U.S. wants Delhi to put more pressure on Tehran to halt its nuclear program. But India needs Iran's oil, and Delhi has consistently objected to the nuclear nonproliferation regime, arguing that it is a form of institutionalized discrimination.

The challenge for both governments is to recognize that a general confluence of interests and values does not mean that they will agree in all cases. In both capitals, officials entertain the idea that they can use the other as an instrument of its own foreign policy. Although tempting, that is dangerously wrongheaded. Both governments will jealously guard their sovereignty and their prerogatives. There are bound to be disappointments as Washington and Delhi learn the limits of their partnership, but it is far better that they build on their shared concerns rather than retreat over their inevitable disagreements.