On Thursday, India and US signed the landmark COMCASA agreement which will redefine the real-time sharing of military inputs and intelligence information between assets on both sides.

Both the Indian and U.S. governments were keen to sign the Communications Compatibility and Security Agreement (COMCASA), which could open up the way for sales of more sensitive U.S. military equipment to India.

The pact enables high-transfer of power. The COMCASA will help India obtain critical and encrypted defence technologies for Indian defence platforms from the US. The sources said text of the agreement is almost ready.

The pact facilitates Indian operation of high-end encrypted and secure communication equipment on American platforms.

"We have been discussing how we can more openly communicate back and forth because of the sensitivity of some of the technology... we have to know that when we share this with another like-minded nation, that we can keep it secure," Mattis said. "I think that we're pretty much there already, on the American side," Mattis added.

The United States has emerged as India's second largest arms supplier, closing $15 billion worth of deals in the past decade,

Once the communications accord is in place it could lead to the sale of an armed version of Guardian drones, as Washington has so far only authorised the sale of unarmed, surveillance versions of the aircraft.

Experts believe the signing of the agreement could also reduce the chances of the United States imposing sanctions on India for looking to buy Russian S-400 surface-to-air missile systems.

India and the US Thursday held the first edition of the two-plus-two talks, aimed at further strengthening bilateral defence and security collaboration as well as boosting their global strategic partnership, particularly in the Indo-Pacific region. 

External Affairs Minister Sushma Swaraj and Defence Minister Nirmala Sitharaman held talks with US Secretary of State Michael R Pompeo and Defence Secretary James Mattis. 

In her opening remarks, Swaraj said she was confident the outcome of the talks will help unleash the untapped potential of the relationship between the two nations and further elevate the level of engagement.

She said there has been significant progress in all key areas of cooperation between the two countries.

In his remarks, Pompeo said both sides should continue to ensure freedom of the seas and work towards peaceful resolutions of territorial and maritime disputes, seen as an oblique reference to China's expansionist behaviour in the South China Sea.

He also stressed on promoting market-based economics and good governance.

Diplomatic sources said both sides will try to finalise certain defence agreements, which will enable their militaries as well as their private sectors to work more closely together, both on defense acquisitions and collaborations. 

The US has been trying to enhance military ties with India, which is seen as an effort to counter-balance China's growing military assertiveness in the region.

In a tweet, External Affairs Ministry Spokesperson Raveesh Kumar said the dialogue was a reflection of shared commitment of the two countries to provide a positive, forward-looking vision to their strategic partnership and rowing convergence on important issues. 

Sources said the US attaches great importance to India's engagement in the Indo-Pacific region and the issue figures prominently in the talks. 

A raft of other important issues like US sanctions on import of Iranian crude oil and India's plan to buy a batch of S-400 air defence missile systems from Russia are being discussed, official sources said.

In May, the US withdrew from the landmark Iran nuclear deal and re-imposed the sanctions that had been suspended in return for curbs on Tehran's nuclear programme.

Iran is India's third largest oil supplier after Iraq and Saudi Arabia. The US' sanctions on import of Iranian petroleum products will be effective from November 4.

Referring to the S-400 missile deal, the sources said it was for the US to decide on what steps it may take if India goes ahead with the procurement, notwithstanding the US' sanctions against Moscow relating to defence supplies.

Earlier in the day, Swaraj and Sitharaman held separate meetings with Pompeo and Mattis respectively.Official sources said a number of key bilateral issues were discussed during the meetings.

MEA Spokesperson Kumar called the meeting between Swaraj and Pompeo a "productive" engagement.

He said the two sides took stock of "impressive strides" in the bilateral relationship and discussed steps to take the relationship to an "even higher trajectory".

Pompeo and Mattis arrived here Wednesday for the inaugural Indo-US two-plus-two talks which was finalised during Prime Minister Narendra Modi's visit to Washington last year.