New Delhi, Sep 7 - Ahead of Prime Minister Sheikh Hasina's trip here later this year, India and Bangladesh will hold talks Tuesday on sensitive issues like the contentious Tipaimukh hydroelectric project and discuss steps to invigorate trade and combat terrorism.

Bangladesh Foreign Minister Dipu Moni arrived here Monday on a four-day visit - her first official visit to New Delhi after Sheikh Hasina rode to power in Dhaka following a landslide victory in December polls last year.

External Affairs Minister S.M. Krishna will hold talks with Moni on a wide range of issues that are expected to build greater trust between the two neighbours and set a positive stage for Sheikh Hasina's state visit to India later this year.

Moni will also call on Prime Minister Manmohan Singh and meet Finance Minister Pranab Mukherjee.

During the talks, Krishna is expected to allay Bangladesh' concerns over the Tipaimukh project that is located near the confluence of the Barak and Tuivai rivers in India's Manipur.

India has already made it clear that there will be absolutely no diversion of water, a fear voiced by the anti-dam lobby in Bangladesh. The Bangladesh Nationalist Party (BNP) has sought to use the dam issue to stoke anti-India sentiments.

Issues like border management, infiltration, illegal migration, sharing of river waters and terrorism will also figure prominently in the discussions.