Washington, Nov 23 To involve Indian and American industries in enhancing investment flows between both countries, the Prime Minister, Dr. Manmohan Singh on Monday said that Indian private sector defence suppliers are now allowed to have up to 26 percent foreign investment, opening a new avenue for Indo-US collaboration.

Addressing the US-India Business Council (USIBC), the premier business advocacy organization representing America's top companies investing in India, joined by global Indian companies promoting economic reforms with an aim to deepen and strengthen bilateral trade and commercial ties, Dr. Singh: "We have an expanding area of defence collaboration, including the possibility of procurement of defence equipment from the US. Our domestic private sector defence suppliers are now allowed to have up to 26 percent foreign investment, opening a new avenue for Indo-US collaboration."

"Our defence and strategic dialogues have added important dimensions to our ties. Maritime security, including countering piracy and protecting sea-lanes of communication in the Indian Ocean and beyond, is another area where we should expand cooperation," he said.

Outlining the Obama administration's "New Strategic Dialogue", U.S. Under Secretary of State for Political Affairs William J. Burns said that greater Indo-U.S. cooperation can be expected on counter-terrorism, the reconstruction process in Afghanistan, non-proliferation, and the defence sector during Dr. Singh's four-day visit to Washington.

In a sign of increasing Indo-US military ties, India has started negotiating the purchase of heavy lift transport aircraft C-17 Globemaster from the U.S. in a deal worth approximately 1.7 billion dollars.

The Indian Air Force has also placed orders for six C-130J aircraft from the U.S., the deliveries of which will commence in 2011.

India is also in the process of finalising the order for 126 multi-role combat aircraft and looking to procure 197 light utility helicopters.

According to Ashley J. Tellis of the Carnegie Endowment for International Peace,U.S.-India defence cooperation is not only going to deepen, but is also going to broaden much more than seen historically.

Tellis has that there are three areas where he thinks bilateral defence cooperation will prosper:

1) Military-to-military cooperation: There is already a very robust pattern of engagement and this will only increase in time.

2) Defence trade: India has slowly started to look to the United States as a supplier of high-end defense equipment. So far, the deals have been modest, but there are very big deals that are on the anvil, which will be concluded within the next decade, and.

3) Defence industrial cooperation: American industry is going to look to India to invest. It's going to be a destination for investment. There is going to be a great deal of co-production and in some cases even co-development over the longer term.

Telllis sees the field of defence as being extremely ripe for "very, very deep cooperation" between the two countries.

Defence cooperation between both countries is overseen and reviewed by the India-US Defence Policy Group (DPG). The Joint Technical Group (JTG) coordinates the transfer of technology and explores the areas of scientific interaction between U.S. and India. Executive Steering Group (ESG) meetings are held annually between the Indian Army, Navy and Air Force commanders and their counterparts in the US forces. by Smita Prakash(ANI)