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US and India agree nuclear defence pact

The United States and India today said they had agreed on a defence pact that takes a major step towards allowing the sale of sophisticated US arms to the South Asian nation as it modernises its military.

US Secretary of State Hillary Clinton, at the end of her first visit to India as Washington's top diplomat, said Delhi had also approved two sites for US companies to build nuclear power plants.

The two agreements gave Clinton tangible accomplishments from a trip designed to deepen ties and demonstrate US President Barack Obama's commitment to India's emergence as a player on the global stage.

"We have agreed on the end-use monitoring arrangement which would refer to ... Indian procurement of US defence technology and equipment," India's External Affairs Minister, S.M. Krishna, told a joint news conference with Clinton.

Known as an "end-use monitoring" agreement and required by US law for such weapons sales, the pact would let Washington check that India was using any arms for the purposes intended and was preventing the technology from leaking to others.

India is expected to spend more than $30 billion over the next five years on upgrading its largely Soviet-made arsenal, roughly a third of which will be a contract to buy 126 multi-role fighters.

That could prove a boon to US companies like Lockheed Martin Corp and Boeing Co.

The two companies are competing with Russia's MiG-35, France's Dassault Rafale, Sweden's Saab (SAABb.ST: Quote, Profile, Research) JAS-39 Gripen and the Eurofighter Typhoon, made by a consortium of British, German, Italian and Spanish firms.

In her talks with Prime Minister Manmohan Singh today, Clinton said he accepted an invitation for him to make a state visit to Washington on Nov. 24.

A State Department official said on condition of anonymity that Singh would be the first foreign leader to make a state visit under Obama, another mark of the relationship's importance to the United States.

Clinton also said New Delhi had approved two nuclear sites reserved for US companies, part of a landmark civilian nuclear agreement the United States and India signed last year.

"I am also pleased that Prime Minister Singh told me that sites for two nuclear parks for US companies have been approved by the government."

US officials estimate that the nuclear sites represent up to $10 billion in business for US nuclear reactor builders such as General Electric Co. and Westinghouse Electric Co, a subsidiary of Japan's Toshiba Corp.