India and the US have signed a project agreement (PA) for an air-launched unmanned aerial vehicle (ALUAV) under the ambit of the defence technology and trade initiative as part of the plan to expand bilateral military cooperation.

The defence ministry said on Friday that the agreement was signed on July 30 under the ambit of the defence technology and trade initiative (DTTI).

Government sources described the development as “very significant” at a time China has been increasingly flexing its muscle in the region.

“Considering China’s aggressive posture, this agreement will pave the way for more cooperation in defence and security. It will convey an unambiguous message about the growing relationship between India and the US,” said a defence ministry official.

The project agreement was signed between the ministry of defence and US department of defence by the co-chairs of the joint working group on air systems under the DTTI.

“The PA outlines the collaboration between Air Force Research Laboratory, Indian Air Force, and Defence Research and Development Organisation towards design, development, demonstration, testing and evaluation of systems to co-develop an ALUAV prototype,” the defence ministry said in a statement.

The main aim of the DTTI is to bring sustained leadership focus to promote collaborative technology exchange and create opportunities for co-production and co-development of future technologies for Indian and US military forces. Under the DTTI, joint working groups on land, naval, air and aircraft carrier technologies have been established for focus on mutually agreed projects in respective domains.

The PA for ALUAV falls under the research, development, testing and evaluation (RDT&E) memorandum of agreement between the ministry of defence and US department of defence, which was first signed in January 2006 and renewed in January 2015.

The agreement is a significant step towards deepening defence technology collaboration between the two nations through co-development of defence equipment, the statement said.

The Aeronautical Development Establishment (ADE) at DRDO and the Aerospace Systems Directorate at the Air Force Research Laboratory (AFRL), along with the Indian and US air dorces, are the principal organisations for execution of the PA.