Defence Secretary Ashton Carter has said India's designation as a 'major defence partner' would allow the US to cooperate with it - in both strategic and technological domains - at par with its closet and most long-standing allies.

"First of all with respect to the major defence partnership agreement, that is a very substantial change. It's an enormous change from 50 years of history. And a very substantial advance over just a few months ago," Carter told Pentagon reporters at a news conference along with Defence Minister Manohar Parrikar.

"And here's the gist of it. It will allow the United States and India to cooperate, which speaking from the US point of view, in a way that we do only with our closest and most long-standing allies. That's a very big change," Carter said.

In June when Prime Minister Narendra Modi visited US and met President Barack Obama, the country had designated India as a 'major defence partner'.

"The Indian government sent us before our meeting today a very lengthy, detailed and we thought very constructive paper about how to implement the major defence partnership understanding. That's an excellent basis for the implementation of the major defence partnership," he said.

The major defence partnership designation, has "knocked down" the previous barriers that came in the way of defence, strategic co-operation including co-production, co-development projects and exercises.

Appreciating the US government's decision, Parrikar said: "In our discussions today, we looked at how this could provide further energy and momentum to our partnership on defence technology and manufacturing. We agreed to continue efforts to establish an efficient framework to encourage tie-ups between our defence companies."

Parrikar said US is one of India's primary sources of defence equipment, and while it has shared some of its cutting-edge platforms, he would like to take this forward to greater collaborative projects.

The two leaders, he said, decided to significantly expand the scope and activities of Defence Technology and Trade Initiative (DTTI).

Carter said the designation builds on the success of last year's framework for the US-India defence relationship.

"It will facilitate defence, trade and technology sharing with India on a level we reserve only for our closest friends and allies, and it will support both of what I have called the two important handshakes between our countries and our two militaries," he said.

"The first is the strategic handshake. As the United States is reaching West in President Obama's rebalance, India is reaching East in Prime Minister Modi's Act East Policy, which will extend India's reach further into the broader Indo-Asia-Pacific region," he said.

The major defence partner designation will also tighten the second handshake between the two countries, the technological one, he said.

"Four years ago, the United States and India created the Defence Technology and Trade Initiative, DTTI, to leverage the convergence between our industrial and technological abilities in an unprecedented way. That initiative grasps hands with Prime Minister Modi's Make in India campaign," he said.

"We made important progress on that technological partnership today, also. We agreed to advance a number of collaborative projects, on jet engine technology, chemical and biological protection, aircraft carriers and other systems; all by the end of the year. That collaboration will surely bring further cooperation, co-development and co-production," he added.

"And we're working together and networking with other Asia-Pacific militaries to provide the security and to promote the principles, including freedom of navigation and overflight, that have benefited so many in the region, including India," Carter said.