Indian and US militaries can now use each other's land, air and naval bases for resupplies, repair and rest with a one-time clearance as per an agreement signed by both sides on Tuesday.
Negotiations for such a deal had begun over a decade ago, and the Modi government has now decided to shift from the former government's view that such a deal would endanger the country's independent foreign policy.
Currently, permissions have to be sought each time there is a US requirement. For example, US warships on a humanitarian relief operation will be provided assistance throughout the duration of their operation based on a single request for Indian support.
India's defence minister Manohar Parrikar, however, clarified that the new deal does not mean that there will be a permanent US base in the country.
His US counterpart Defense Secretary Ashton Carter said: "We can come here only if we are invited by the Indian government."
The text of the new Logistics and Support Agreement, however, has not been finalised.
According to Carter, the new logistics agreement "reflects the fact that we expect to be working more, our Navies together, our Air Forces together, our Armies together and we want to have the ability to respond together to let's say a humanitarian disaster... this doesn't bind anybody to doing anything in particular."
Parrikar referred to the case of the devastating Nepal earthquake last year which saw US planes carrying relief and aid refueling in India.