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However, a new defense bill proposes giving the US president authority to grant waivers when national security interests are at stake.

"There's been no decision made". They underscore the global community's scrutiny over the threat of terrorism emanating from Pakistan, which has affected India and the United States alike. The US would continue to practise "partnership economics with India and other countries" in the region, he said, adding that he hoped a pact would be finalized with Westinghouse for it to supply nuclear power plants to India.

"They are (missile system purchase from Russian Federation and oil from Iran) part of the conversation".

Analysts say the deal could result in the U.S. transfer high-tech equipment such as the Sea Guardian armed surveillance drones to India. He said the United States was working to impose CAATSA Section 231 in a way that is appropriate and lawful and to exercise that waiver authority only where it makes sense.

Aside from agreeing to joint drills, the two countries also signed a "Communications Compatibility and Security Agreement".

U.S. Secretary of State Mike Pompeo shakes hands with India's Foreign Minister Sushma Swaraj before the start of their meeting in New Delhi, September 6, 2018.

The COMCASA will also provide a legal framework for defence technology transfer between the United States and India and help New Delhi acquire critical platforms like Sea Guardian drones from the US.

Iran is India's third-largest oil supplier behind Iraq and Saudi Arabia. It has since been pressuring Iran's crude clients to halt their purchases from the Islamic Republic. "Given our shared interests, we are confident that we can work together to promote peace, economic prosperity and security in our region and beyond".

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Instead, Delhi committed to buy Russian and even a French nuclear reactor because these are government-to-government contracts, while Westinghouse is a private United States company.

The Trump White House has said that it seeks to bring Iran's oil sales supposedly down to "zero".

Mattis said the two sides also agreed to "increase and expand our engagement in the maritime domain" with a new joint exercise on India's coast in 2019, and a hotline between the two countries.

The United States and India took a major step to expand defense ties Thursday, signing a deal that allows India to acquire high-end US weaponry, including armed drones.

"Mohammad, Hizb-ul Mujahideen, the Haqqani Network, Tehrik-i-Taliban Pakistan, D-Company, and their affiliates", it said.The two sides further reaffirmed their commitment to ongoing and future cooperation to ensure a stable cyberspace environment and to prevent cyber attacks. "They will certainly come up, but I don't think they will be the primary focus", Pompeo told reporters earlier on Thursday. The leitmotif is "interoperability", which translates as India's incremental induction into the US' Indo-Pacific alliance system.

He noted access to Iranian oil imports were vital to India's growth in the coming decades, while the USA is demanding allies cut trade with Tehran.

"There was broad agreement between myself, foreign minister (Shah Mahmood) Qureshi, and Prime Minister Imran Khan that we need to take steps that will deliver outcomes on the ground, allowing us to begin to build confidence and trust between our two countries", he added.