After talks on Sunday, both sides announced a breakthrough on a pact that will allow US companies to supply India with civilian nuclear technology.
Indian PM Narendra Modi said it was a "new journey" of co-operation.
Mr Obama will meet the main opposition Congress party leaders later on Monday and will also speak at a business summit.
Trade vow Republic Day marks the adoption of India's constitution in 1950, three years after independence from Britain.
Uniformed soldiers in colourful headgear marched down Rajpath, or King's Avenue, where Mr Obama watched the parade with Mr Modi inside a bullet-proof glass enclosure.
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