The Indian envoy met McDonnell, who had led a large state trade mission to India last November, in the State capital of Richmond.
She agreed with the governor in stressing the need to constantly nurture the bonds of friendship, including through building partnerships, especially in the field of education and between research institutions of the two countries, the Indian Embassy said.
Rao also spoke at the inaugural dinner in Richmond on the establishment of the India Chair in Democracy and Civil Society at the L Douglas Wilder School of Government and Public Affairs at the Virginia Commonwealth University (VCU).
In a grand ceremony, which also featured an address by McDonnell, Rao emphasised that democracy, freedom from fear, respect for civil liberties, and the rule of law provide essential foundations to the great edifice of India - US strategic partnership.
Addressing an International Business Summit at the VCU on the theme 'The rise of India in the global business arena', Rao said that rapidly growing commercial elements of India-US business ties provided a key underpinning to the bilateral strategic relationship.
Later, in a meeting with a cross-section of the top business community in Richmond, Rao underlined that India's economic reforms are progressive and investor-friendly.
India is open for business, and the Government of India, and the Embassy in particular, are always ready to facilitate strengthened business partnerships between the two countries, she said.