The proposals forward by the US include sale of Guardian UAVs, aircraft carrier technologies, the future vertical-lift programme, and F-18 and F-16 fighter aircraft.
"In keeping with India's status as a 'Major Defence Partner' a status overwhelmingly endorsed last year by the US Congress and our mutual interest in expanding maritime cooperation, the Trump administration has offered a menu of defence options for India's consideration, including the Guardian UAV," Tillerson told a Washington audience.
He said the military proposals put forward by the US to India can be "potential game changers" for the commercial and defence cooperation.
Tillerson said even as the US and India grow their economic and defence cooperation, they must have an eye to include other nations which share their goals.
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"India and the US should be in the business of equipping other countries to defend their sovereignty, build greater connectivity, and have a louder voice in a regional architecture that promotes their interests and develops their economies," he said.
Tillerson said that the increasing convergence of US and Indian interests and values offer the Indo-Pacific the best opportunity to defend the rule-based global system.
"But it also comes with a responsibility for both of our countries to 'do the needful' in support of our united vision of a free, open, and thriving Indo-Pacific," he said.
The US welcomes the growing power and influence of Indian people in this region and throughout the world, he added.
Tillerson said the US is committed to working with any nation in South Asia or the broader region that shares its vision of an Indo-Pacific where sovereignty is upheld and a rule-based system respected.
"The fact that the Indian Navy was the first overseas user of the P-8 maritime surveillance aircraft, which it effectively fields with US Navy counterparts, speaks volumes of our shared maritime interests and need to enhance interoperability," Tillerson said.
Defence Secretary Jim Mattis has said that the world's two greatest democracies should have the two greatest militaries.
"I couldnt agree more. When we work together to address shared security concerns, we don't just protect ourselves, but others," he said.
"Earlier this year, instructors from the US and Indian Armies came together to build UN peacekeeping capacity among African partners, a program that we hope to continue expanding. This is a great example of the US and India building security capacity and promoting peace in third countries and serving together as anchors of peace in a tumultuous world," Tillerson said.