The launch on Thursday of the intermediate-range Agni-III missile capped New Delhi's drive to produce a device capable of striking targets 3,500 kilometers (2,170 miles) inside China, which has an unresolved border dispute with India.

The government's Defence Research and Development Organization (DRDO) now says it now has the technology to build Inter-Continental Ballistic Missiles (ICBM) that would extend nuclear-armed India's reach beyond Asia.

"We have achieved the capability to make missiles with a range of 5,500 kilometers but the decision to develop an ICBM has to be taken by the political leadership," DRDO chief M. Natarajan told reporters in New Delhi on Friday.

Natarajan, India's chief military scientist, said a day after the Agni-III's test flight that the DRDO, which launched India's guided missile development project in 1983, had already begun to design an ICBM.

"DRDO scientists are working on miniaturizing systems of Agni-III so that a third stage can be squeezed into the 16-meter-long missile to enable it to go up to 5,500 kilometers with the same 1.5-ton payload," he said.

Agni-III project chief Avinash Chander told AFP that a second test of the intermediate-range missile would take place either in August or October.

DRDO sources said the agency, which is also jointly developing a supersonic cruise missile with Russia, would seek New Delhi's clearance before it actually began building an ICBM prototype after the second Agni III test.

India started working secretly on nuclear weapons after China conducted its first atomic test in 1964 -- two years after Beijing fought a brief but bloody border war with its neighbor.

New Delhi detonated its first atom bomb in 1974 and, 24 years later, declared itself a full-fledged nuclear weapons state following a series of tests including that of a 46 megaton-yield thermo-nuclear device.

Former DRDO chief K. Santhanam said while India was capable of building an ICBM, production of one "would unnecessarily affect ties" between India and the United States, which in 2005 agreed on a historic civilian nuclear energy deal.

"Even in its wildest dreams, India does not plan to be a global superpower but in the regional perspective a 3,500-plus-kilometer range IRBM is enough to deter adventurism from across our two borders," Santhanam said, referring to Pakistan and China.

Since the subcontinent's 1947 independence, India has fought three wars with Pakistan, which declared itself a nuclear weapons state after carrying out copycat tests in 1998.

"Given our robust economic growth, resurgent markets and our nuclear-tipped stockpile of (1,000 kilometer-range) Agni-Is and (2,000-kilometer) Agni-IIs, we should be satisfied as a leading regional power," Santhanam said.

Kapil Kak, director of the independent Centre for Strategic Studies think-tank, agreed.

"Given the international security situation and emerging power configurations, a program to develop ICBMs is definitely unsuited for India's interests," he said.

"It would raise hackles in the U.S. ," said Kak, a former air marshal.

Sources say the DRDO's most treasured dream -- denied in public -- remains the development of an ICBM with a range of 15,000 kilometers, already christened Surya or sun, to match Chinese DF-3 ICBMs that can hit U.S. cities.