The agreement, which was decided during the visit of US President Barack Obama to India in January and focuses on issues ranging from maritime security, aircraft carrier to jet engine technology cooperation, was inked by Defence Minister Manohar Parrikar and visiting US Defence Secretary Ashton Carter.
The signing of the agreement comes as the two countries moved ahead on two of the four "pathfinder projects" identified under the Defence Trade and Technology Initiative (DTTI) during Obama's visit.
The other is a protective suit for the Indian Army that would be more lightweight and effective when used in chemical and biological hazard incidents.
Carter also met with Prime Minister Narendra Modi, External Affairs Minister Sushma Swaraj and National Security Advisor Ajit Doval and discussed ways to enhance strategic and defence interest.
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"As far as DTTI is concerned, many things are coming closer. I think two or three issues may be sorted out, not necessarily today but in a couple of weeks. They are very close to finalisation," he said.
During Obama's visit, both countries had identified four "pathfinder projects" as well as decided to explore development of aircraft carrier technologies and jet engines.
The pathfinder products are the Raven mini unmanned aerial vehicles (UAVs), "roll-on, roll-off" mission modules for C-130J Super Hercules aircraft, mobile electric hybrid power sources, and chemical-biological warfare protection suite for soldiers.
The visit comes as US re-balances itself to Asia Pacific. A top Pentagon official had in March termed China's ongoing territorial dispute with countries like Brunei, Taiwan, Malaysia, the Philippines and Vietnam over the South China Sea as "provocative".