The agreement with the US is expected to be signed during defence minister Manohar Parrikar's visit.
Ships and aircraft of the US and India will soon be able to use other bases for refuelling, refurbishment and replenishment. A long-pending agreement for this is set to be signed when Defence Ministry Manohar Parrikar visits USA on August 29, top sources told NDTV.
"The draft agreement has been accepted by both sides," a senior Defence Ministry official told NDTV. The in-principle Logistics Exchange Memorandum of Agreement or LEMOA was reached when US Defence Secretary Ashton Carter visited New Delhi earlier this year.
Although India and the US use each other's bases for picking supplies and refuelling, these are cleared on a case to basis. Payments also have to be made separately in each case.
The LEMOA brings these transactions under a framework, which will also streamline the payment system.
Discussion for signing LEMOA -- one of the three "foundational" agreements of the USA for better military cooperation -- has been on a decade, with the US has been asking India to sign.
But the erstwhile UPA government had refused to sign, fearing adverse reaction from China. It also wanted to avoid giving an impression that it was getting too close to the US.
The two other agreements are the Communication and Information Security Memorandum Agreement and the Basic Exchange and Cooperation Agreement. There has been no movement on these two as India believes its concerns on security have not been addressed comprehensively.
The LEMOA has been tailored to meet India's concerns - it is not the version signed by NATO countries.
The agreement limits extending facilities only for humanitarian disaster relief missions, training exercise and friendly port calls.
India will be under no obligation to extend facilities if US is on an offensive posture against a "friendly country", top sources told NDTV.
Also, the USA cannot position its soldiers in India or Indian bases nor does the agreement allow for permanent bases in each other's territory.
The agreement will not only help the US but India as well. In particular, it will help the Indian Navy and the Air Force increase their global footprint.
They will be able to use US bases across the globe, especially those in East Africa, Persian Gulf, Diego Garcia, The Philippines, Australia and Japan.