The "major defence partner" status was finalised by the defence ministers on Thursday.
Defence Minister Manohar Parrikar and outgoing US Defence Secretary Ashton Carter on Thursday finalised the "major defence partner" status to India which will fast-track cooperation and sharing of high-end American defence technology.
Both sides also vowed to expand the bilateral defence cooperation as Mr Carter met Mr Parrikar here for the record-breaking seventh time.
"Today we finalised India's designation as a 'Major Defence Partner' of the US. The designation as a Major Defence Partner is a status unique to India and institutionalises the progress made to facilitate defence trade and technology sharing with India to a level at par with that of the US's closest allies and partners, and ensures enduring cooperation in the future," a joint statement after the meeting said.
Mr Carter also called on Prime Minister Narendra Modi. Officials explained that details regarding US licensing rules among other have been finalised.
The statement added that both sides exchanged views on regional security issues including threat posed by terrorism.
"They agreed to continue further strengthening the bilateral counter terrorism cooperation and underlined the need to ensure that terror groups receive no patronage from any State," it said.
Citing common values and shared desire for peace and prosperity in Asia Pacific and Indian Ocean Region, the two leaders reflected on the convergence of interests that have driven the strategic and technological "handshakes" between both nations and led to historic progress in bilateral ties, the statement added.
It said that bilateral defence ties have in the recent years moved along a "remarkable upward trajectory".
"Thank you my friend," Mr Carter told Parrikar as both met at the South Block here.
Mr Carter said that this is the seventh meeting that he was having with Mr Parrikar. "He is the Defence Minister with whom I have met for the maximum number of times," he said emphasising the importance that US puts on its ties with India.
During the meeting, which was more of a thanksgiving one, Mr Carter said, "Today our defence relationship takes a major step as we designate India as a major defence partner.