India successfully tested a nuclear-capable missile on Sunday, a defence ministry spokesman said, days after the government proposed a resumption of talks with arch-rival Pakistan.

The surface-to-surface Agni-III missile with a range of more than 3,000 kilometres (2,000 miles) was fired from Wheeler Island, off the coast of the eastern state of Orissa.

"It hit the target with pin-point accuracy and met all the mission objectives," ministry spokesman Sitanshu Kar told reporters in New Delhi.

The trial meant "now the missile system will be fully inducted into the armed forces," he said.

It was the fourth test of the weapon, which can carry conventional or nuclear payloads of 1.5 tonnes and uses solid fuel.

Defence Minister A.K. Antony congratulated organisers on the "remarkable success" of the project, which came as a breakthrough appeared possible in India's fraught relations with Pakistan.

India on Wednesday said it was open to foreign secretary-level talks with its neighbour, signalling an improvement in ties badly damaged by the 2008 attacks in Mumbai.

The two nuclear-armed nations launched a peace dialogue in 2004 that helped lower tensions but India halted talks after the Mumbai siege and steadfastly refused to restart them until Islamabad brought those behind the attacks to justice and cracked down on militant groups on its soil.

India blamed the assault on its financial hub on the Pakistan-based Lashkar-e-Taiba (LeT) militant group.

Observers said India's latest proposal of talks would not amount to a resumption of the full-scale dialogue, but would be a step in that direction.

The United States, battling the Taliban in Pakistan's neighbour Afghanistan, is keen to calm friction between New Delhi and Islamabad to prevent any further regional instability.

Pakistani officials have pushed Washington to persuade India to resume the dialogue, claiming the perceived threat from India limits Pakistan's capacity to fight Al-Qaeda and its own Taliban insurgency.

The rival countries have fought three wars since their independence in 1947, two over Muslim-majority Kashmir, which is divided between them but claimed in full by both.

Large separatist protests have erupted in Indian Kashmir over the last week, sparked by allegations that the police were responsible for the deaths of two teenage boys.

The Indian-built Agni-III missile -- Agni means fire in Sanskrit -- was first tested in 2006 and brings major cities in China, such as Shanghai, within striking distance, defence analysts say.

The missile tested on Sunday was fired from a mobile rail launcher, government sources said.