India is planning to export drones and spy equipments to the US and other allies, as it looks to become a defence manufacturing hub in close cooperation with the US.
US defence contractors AeroVironment and Lockheed Martin are set to begin production of drones in India for overseas sales, Bloomberg reported, citing two Indian defence officials with knowledge of the matter.
AeroVironment is known for its Raven drone and Lockheed Martin produces the 'Roll On-Roll Off' kits, which turn jumbo transport jets into surveillance aircraft.
They are part of the four defence technologies the US agreed to jointly produce in India. The deal was agreed when President Barack Obama visited New Delhi in January.
Given the limited demand for drones in India, exports would make production viable. The nations have not released many details on the manufacturing deals, including how many units will be produced and when they will be ready for delivery.
The US move to increase joint defence production with India is expected to benefit in a number of ways. It would support Prime Minister Narendra Modi's 'Make in India' campaign that is intended at boosting the country's manufacturing sector.
India, currently the world's largest arms importer, has earmarked $150bn (£101bn, €137bn) for the modernisation of its defence equipment, missiles, artillery, fighter jets and submarines. The US is expected to profit largely from India's big spending on defence, while the Asian country would be able to reduce arm imports.
India accounted for 15% of global weapons imports from 2010 to 2014, followed by China at 5%, according to data from the Stockholm International Peace Research Institute. Russia provided 70% of India's weapons during the period, while the US accounted for just 12%.
In addition, India is looking to counter China's growing military capabilities with its partnership with the US. The neighbouring Asian countries have existing border tensions, and are competing for dominance in the Indian Ocean.