The United States said it was prepared to sell advanced warplanes and other high-tech arms to the south Asia nation.
The announcement came on the heels of yesterday's landmark civilian nuclear co-operation pact with India.
"Where only a few years ago, no one would have talked about the prospects for a major US-India defence deal, today the prospects are promising, whether in the realm of combat aircraft, helicopters, maritime patrol aircraft or naval vessels," the US Defense Department said as President Bush paid a three-day visit to India.
"The next step is to turn the talk of prospective sales into reality. The United States is committed to working with India to do this," the department added.
The Pentagon release did not mention any specific deals except to note that Washington was prepared to offer Lockheed Martin F-16 and Boeing F/A-18 jet fighters to India.
"It is our goal to help meet India's needs in the defence realm, and to provide important capabilities and technologies that India seeks. We are on a path to accomplish this," the Pentagon said in Washington.