NEW YORK (Reuters) - In a glitzy show of lights, lasers and slogans, populist Indian Prime Minister Narendra Modi delivered a triumphal address to tens of thousands of Indian-Americans and U.S. dignitaries in New York on Sunday, less than a decade after he was barred from the United States over bloody sectarian riots.

Speaking at Madison Square Garden, a venue more used to hosting big sports events and the greatest names in rock music, the Hindu nationalist leader urged the Indian diaspora to join his movement for the development of India.

"The Indian-American community has played a big role in changing the way the world views India - from a nation of snake-charmers, to people who are adept at working the electronic mouse," he said, referring to India's modern-day reputation as an IT powerhouse.

"A government alone cannot achieve development for the whole country, but it can be done if the public were to participate in the development work," Modi said.

His speech came ahead of a two-day visit to Washington and a first meeting with U.S. President Barack Obama, where the two leaders will aim to reinvigorate a relationship that has failed so far to live up to billing by the latter as "one of the defining partnerships of the 21st Century."

Members of fast growing 3.2 million-strong Indian diaspora, cheered and chanted "Modi, Modi!" during his 70-minute address in Hindi at Madison Square Garden, where they made up one of the largest crowds seen in the United States for a foreign leader.

On Saturday, Modi appeared before some 60,000 people at the Global Citizen Festival in New York's Central Park, where performers including Jay Z and Sting backed a campaign to end global poverty and bring essentials such as sanitation to all - an effort the Indian leader is pushing at home.

On Sunday, Modi drew an especially loud cheer when he made a long-awaited announcement that those holding cards showing they were of Indian origin would be granted lifetime visas to India.

"No government has done anything like this for us so far," said Jayashree Iyer, a New Jersey resident who had come with her family to hear Modi speak.

Her two daughters would not now have to keep renewing their visas, said Iyer, who has been in the United States for four years.

INFLUENTIAL DIASPORA

India's U.S. diaspora makes up only about one percent of the U.S. population, but it is growing fast, highly educated and increasingly influential, including leaders of government agencies and high-tech corporations such as Microsoft, where India-born Satya Nadella became CEO this year.

Many Indian-Americans have embraced Modi and his pro-business message and hope his visit will show India's importance not only on these shores but in wider the world too.

At Madison Square Garden, where former Beatle and fan of Indian mysticism John Lennon played one of his last concerts, were more than 30 members of the U.S. Congress hoping for expanded business and political ties with India's 1.2 billion people as a result of reforms Modi has pledged.

It was a far cry from 2005, when the 64-year-old former chief minister of Gujarat was denied a U.S. visa over rioting in his home state that killed more than 1,000 people, mainly Muslims, three years before. Modi, who denies wrongdoing, has been exonerated by an Indian Supreme Court probe.

However, the issue has not been forgotten and Modi's U.S. trip had an awkward start on Friday after a little-known human rights group filed a lawsuit against him in New York, alleging that he failed to stop the Gujarat riots.

Back in Gujarat at the weekend, authorities arrested at least 40 people after late-night clashes between Hindus and Muslims in the city of Vadodara.

Modi's May election triumph was driven largely by his vow to revive the economy after years of sub-par growth.

On Monday, Modi will meet U.S. corporate leaders, including those of Google IBM, GE, Goldman Sachs and Boeing, in a bid to lure fresh foreign investment.

However, the U.S. business lobby has yet to be swayed by his reform rhetoric and has called on Obama to press the Indian leader to remove barriers to fair trade.

U.S. officials have played down the possibility of big-ticket announcements during Modi's visit, but they are hoping it will lay the groundwork for closer long-term ties with a country Washington sees as a key counterbalance in Asia to an increasingly assertive China.

U.S. weapons makers are watching closely for signs of a closer strategic relationship with the United States, which has proposed a host of new defense cooperation projects.

Sources familiar with the matter said last week that India is expected to choose Sikorsky Aircraft's S-70B Sea Hawk helicopters at a 16-aircraft tender worth over $1 billion, and that a decision could come during Modi's visit.

(Reporting by Saqib Iqbal Ahmed in New York; Additional reporting and writing by David Brunnstrom in Washington; Editing by Nick Zieminski)