US diplomatic sources said Hagel will aim to take defence cooperation beyond military hardware sales and transfer of technology under the so-called Defence Technology Initiative (DTI) to joint manufacturing of weapon systems in India under the 49% FDI route announced by Jaitley in the budget.
US under secretary of acquisition, technology and logistics, Frank Kendall, the principal interlocutor for the DTI, is accompanying Hagel and will hold a meeting with Doval. Talks will cover the situation in the Af-Pak region and the rise of fundamentalist forces like ISIS in West Asia as well as a possible deal on purchase of some 3,000 advanced military vehicles that US troops plan to leave in Afghanistan after withdrawal this year.
The Americans are also willing to deepen service-to-service engagements with advanced and multilateral military exercises as well as to strengthen Indian capabilities on the borders. On the agenda will be the purchase by India of six more C-17 heavy lift aircraft, 10 Chinook CH 77 heavy lift helicopters, 22 Apache Longbow attack helicopters and 200 Honeywell engines for upgradation of the Jaguar fighter fleet.
US military sources told HT Washington was also willing to look at the advanced surveillance requirement for Indian troops manning the 4,088-km Line of Actual Control (LAC), high-speed interceptor boats for patrolling the disputed Pangong Lake in eastern Ladakh as well as low-level radars to plug gaps in air defence.
South Block officials said both countries need to get into joint development and manufacturing of military systems, which would create jobs and nullify the possibility of Washington blocking the sale of spares in the event of any disagreement.