India and Bangladesh have agreed to address their trade imbalance and step up efforts in the war on illegal drugs.
Ms Zia is visiting Delhi for the first time since taking office in 2001
The move came after Prime Minister Manmohan Singh met his Bangladeshi counterpart, Khaleda Zia, in Delhi. Annual trade is $1bn in India's favour.
A joint statement said expanding trade was important for both countries. India said the neighbours had also agreed to "join hands" in fighting terrorism.
The visit is Ms Zia's first to India since taking office in 2001.
Mr Singh had earlier said Bangladesh was a country with which India had "intimate ties".
"A strong and prosperous Bangladesh is in India's interest," he told journalists after Ms Zia had been accorded a ceremonial welcome.
Before meeting Mr Singh, the Bangladeshi premier held talks with Indian Commerce Minister Kamal Nath and the president of the governing Congress party, Sonia Gandhi. Ms Zia also met Indian President APJ Abdul Kalam.
On the issues of water sharing and security, both leaders agreed to hold more frequent and regular secretary-level meetings.
Both leaders agreed to join hands in tackling terrorism
Ahead of the talks, India's Border Security Force (BSF) told the Reuters news agency that there had been a 30% increase in the number of Bangladeshis detained while trying to enter the eastern border state of West Bengal since 2005.
At least 1,200 Bangladeshis had been detained this year, BSF Inspector General Somesh Goyal said.
"We are deploying more troops to plug the gaps in the new transit points," he said.
India is constructing a fence along its entire border, 2,500 miles (4,000km) long, with Bangladesh in an attempt to keep out tens of thousands of illegal immigrants.
Bangladesh says it has no objection to the concept of a fence but does not agree with its exact location.
Analysts who have been watching the on-again off-again relationship between the two neighbouring countries are sceptical about any major breakthrough.
Ms Zia, who arrived in the Indian capital on Monday, was also expected to brief India on recent steps taken by her government to deal with Islamic militants.
Delhi has been concerned at the rise of Islamic extremism in Bangladesh.
Bangladesh began cracking down on suspected militants of the banned Jamaat-ul Mujahideen (JMB) in August last year, since when there have been a string of bomb attacks blamed on the group.
More than 30 people have been killed in the blasts. Most of the group's senior figures have now either been arrested or killed in security operations.