Street Wize News ( Raw &Unkutt )

New Delhi, India (CNN) -- U.S. President Barack Obama started his second day in India on a lighter note: pulling a few dance moves and celebrating a major religious festival with local students.

Obama and first lady Michelle Obama spent Sunday morning at a local school, where students were celebrating Diwali. Youngsters performed dances in colorful saris to mark the festival of lights. The president bobbed his head to the music and clapped.

Young girls danced with baskets on their heads as the room erupted in cheers.

At one point, students pulled the first lady on stage and taught her how to twirl.

"Notice they didn't ask me," the president said.

Students later extended the offer to the president, who joined them and towered over the youngsters as he danced.

Obama also visited students at Holy Name High School, where students in school uniforms explained their projects to the president. One girl described her "eco-friendly village" with a large windmill.

"Did you guys get that -- a tree a day keeps global warming away," Obama told journalists.

Obama also attended an agriculture exposition and took part in a town hall-style meeting with students at St. Xavier's College in Mumbai. He and the first lady then visited Humayun's Tomb, a magnificent architectural precursor to the Taj Mahal, before heading to New Delhi for a private dinner Sunday night with Indian Prime Minister Manmohan Singh.

At the meeting with the students, Obama faced some difficult questions including his thoughts about jihad and why the United States doesn't consider Pakistan -- India's neighbor and rival -- a terrorist state.

The president said it was necessary to isolate those who distort religion as a means for war, and said young people have a role in rejecting violence as a way to mediate differences.

On Pakistan, Obama called it a country of enormous potential that had extremist elements. He acknowledged that progress against militants there was "not as quick as we'd like," particularly in the difficult terrain of the northwest territories along the border with Afghanistan.

Obama also said that India has the biggest stake in its neighbor's success, and that he hoped over time that the two nations develop further trust and cooperation.

"The United States stands to be a partner in that process, but can't impose that," Obama said.

The relatively light agenda on the second day of Obama's 10-day, four-nation Asian trip followed the president's unveiling Saturday of about $10 billion in contracts for U.S. exports to India.

"The United States sees Asia, and especially India, as a market of the future," Obama said at a meeting with business leaders from both countries. "For America, this is a jobs strategy."

Promoting broader trade relations with India is a delicate balancing act for Obama, given American frustration with the outsourcing of jobs to call centers in the country.

But Obama said the notion of Indian outsourcing being a net drain on the U.S. economy is part of a "caricature of India as a land of call centers and back offices that cost American jobs."

Obama's three-day visit to India, Asia's third largest economy and one of the world's few growth markets, also will include bilateral talks with Singh and an address to the the nation's parliament.

After India, Obama will travel to Indonesia, then on to the G-20 meeting in South Korea and APEC (Asia-Pacific Economic Cooperation) summit in Japan.