In a statement, India's defense minister said the US and Indian militaries plan to work together more in the future, adding, defense is one of the most important aspects of the bilateral relationship.
The long-pending pact was signed after External Affairs Minister Sushma Swaraj and Defence Minister Nirmala Sitharaman held the first edition of the "two-plus-two" talks with US Secretary of State Michael R Pompeo and Defence Secretary James Mattis.
Both the Indian and US governments are keen to sign the Communications Compatibility and Security Agreement (COMCASA), which could open up the way for sales of more sensitive USA military equipment to India. "We look forward to discussing our respective visions for further strengthening this relationship", he said.
Most recently, the US has taken issue with India's purchase of oil from Iran and its planned acquisition of a Russian missile defense system.
"What the protocol will be in sharing information linked to non-US systems is something that is not yet clear", he said. "Some countries we don't want this tech to fall in the hands of", Felter said, adding the USA has similar agreements with less than 30 countries. India trades extensively with Russian Federation and Iran, which are now facing American sanctions.
"We know the threats to stability that exist in the region, and the United States seeks to ensure that both of our peoples can live in peace and in freedom", Pompeo said. Clearly, the Indian establishment sees in the developing regional power dynamic an opportunity to boost Indian military capabilities by exploiting the US' growing rivalries with China. India has a surplus of $23 billion in trade with the USA, and Washington wants to reduce it by forcing New Delhi to buy more American products.
New Delhi, one of the biggest buyers of Iranian crude, will have to find measures to nullify the effect of United States sanctions on Iran.
The format was first agreed to a year ago, during a visit to the US by Indian Prime Minister Narendra Modi for a meeting with US President Donald Trump.
Under current U.S. rules, third countries could face sanctions if they transact with Russian defence or intelligence sectors.
Experts believe the signing of the COMCASA agreement could also reduce the chances of the United States imposing sanctions on India for looking to buy Russian S-400 surface-to-air missile systems.
The Modi government's decision to ramp up the defence relationship with the U.S. is the new, big turn on India's foreign policy front in the wake of the historic 2+2 summit Thursday. The two countries have for decades jostled for influence in war-torn Afghanistan.
Known by its acronym COMCASA, the Communications Compatibility and Security Agreement provides the legal mechanism to allow for exchange of cyber communications, surveillance data, transfer of communication equipment and setting up secure communication channels.
The defence and security cooperation between the USA and India is on an upswing in the last few months.
Economic links have blossomed since India's market reforms in the early 1990s.
The relentless manner in which Washington is putting in place the underpinnings of interoperability shows clearly where it wants to take the defining partnership.
A recent Foreign Policy piece argued "America shouldn't miss its chance with India".
However, Donald Trump's U.S. also wants Delhi to pay back for some of the heavy-lifting it has done over the past decade. "Those are the kinds of topics that secretary Mattis and I are hoping to address - not that those are not important, but they are not part of the structural relationship between the two countries".
"India has been doing so till now, and it will manage similarly in the future", Joshi said.
India will continue to walk a tightrope between Washington and its traditional allies.