India has emerged as the world's largest arms buyer in recent years, but hopes to reverse this by strengthening its domestic defense industry. The United States was India's largest arms supplier in recent years, dislodging Russia as New Delhi's principal source of weapons.
Defense Minister Arun Jaitley told parliament that India bought arms worth nearly $5.5 billion from the United States in the last three years, surpassing purchases from Russia worth about $4 billion during the same period.
According to Rahul Bedi at IHS Jane's Defense Weekly in New Delhi, more deals with Washington are in the pipeline.
"There are two contracts for helicopters, attack helicopters and heavy lift helicopters, which the U.S. has secured over Russian platforms, they were pitted against Russian helicopters, and that is worth another $2.5 billion, so the American kitty seems to be growing," Bedi said.
In recent years, India has been trying to diversify its arms purchases to move away from its huge dependency on weapons from Moscow, its Cold War ally.
New defense deals with the U.S. are expected to focus on projects that will transfer production and technology know-how to India, as New Delhi tries to boost local production of high technology weapons.
The government last week raised foreign investment in the defense sector from 26 percent to 49 percent, hoping to woo foreign arms manufacturers.
India's failure to build a domestic military industry has made it the world's top buyer of weapons. But Prime Minister Narendra Modi said the country must lower dependence on imports.
On a recent visit to India to deepen military cooperation, Defense Secretary Chuck Hagel indicated that the U.S. is willing to move from buying and selling arms to co-production and co-development.
"This has been an area of great contention between India and the U.S., " Bedi said, noting that freer exchange of technology will benefit India. "But the recent visit of U.S. Defense Secretary Chuck Hagel outlined about 10 technologies which they were willing to transfer to India and technologies that India is in need of. But nothing has been concluded and there is a lot of negotiation left, but it seems as if the U.S. is more amenable to transfer technology to India and that is good for India's local industry."
Among the weapons on offer for technology sharing is the anti-tank Javelin missile. The U.S. has called it an "unprecedented offer."
Defense analysts say the U.S has increased its presence in India's defense market due to two reasons: despite some ups and downs, strategic relations between the two countries have improved, as India is seen as a counterbalance to China. Also, in the last two decades, analysts say, Russia became an unreliable supplier, often missing deadlines and raising costs.