Prime Minister Manmohan Singh will hold talks with visiting German Chancellor Angela Merkel on Tuesday for closer cooperation in trade between the two nations.

They would also discuss terrorism, defence and the sharing of technologies, climate change, and reform of global institutions, including the IMF.

This will the first inter-governmental dialogue between India and Germany, the only second such mechanism Berlin has with any non-European country after Israel.

She will be conferred the Jawaharlal Nehru Award for International Understanding by President Pratibha Patil at Rashtrapati Bhawan Tuesday evening - the second German leader to win this coveted prize after then chancellor Helmut Kohl.

A slew of agreements are expected to be signed after talks between Manmohan Singh and Merkel. There could be important announcements about Germany assisting India in the areas of high technology and vocational education. Germany is known for its prowess in green and energy-efficient technologies, Vishnu Prakash, the spokesperson of the external affairs ministry, told reporters Monday.

The agenda for the Manmohan Singh-Merkel talks was firmed up Monday during talks between External Affairs S.M. Krishna and his German counterpart Guido Westerwelle here.

Germany is India's largest trading partner in Europe, with bilateral trade estimated to be 15.5 billion euros. Germany has invested 2.7 billion euros in India.