India is set to buy six Hercules transport planes from U.S-based Lockheed Martin. As Anjana Pasricha reports from New Delhi, this will be India's biggest arms deal with the United States, and a major departure in New Delhi's military purchasing policies.

Defense Ministry officials says India's security cabinet, headed by Prime Minister Manmohan Singh, recently approved a deal to buy six Hercules transport planes from the United States.

The contract for the C-130J planes is expected to be signed next month. The deal will be worth more than $1 billion.

Lockheed Martin officials have told local media they will configure the planes according to India's needs, and equip them with missiles and radar warning systems. The planes are meant to enhance India's special forces capability.

Although the number of planes involved is small, the deal represents a major change in policy by New Delhi. The Indian Air Force currently uses transport aircraft supplied by the former Soviet Union. The Hercules purchase will mark the first big entry of American military equipment into the Indian defense forces, which for decades have relied heavily on Soviet arms and armaments.

Defense analyst Uday Bhaskar, former director of Institute for Defense Studies and Analyses in New Delhi, says the purchase of American military equipment follows the vast improvement in the political and strategic relationship between the two countries in recent years.

"The United States has not been a significant supplier of military inventory to India for a variety of complex reasons that go back to the Cold War,' said Bhaskar. "The contract for the transport aircraft is a positive development, and it would balance the field as far as India is concerned. My sense is that the United States and India would be looking at this for the long term."

Lockheed Martin and Boeing, the other major American aircraft manufacturer, are also bidding on a $10 billion contract to supply India with 126 combat aircraft. New Delhi is further reported to be negotiating the purchase of American reconnaissance aircraft.

India has emerged as the biggest buyer of military equipment in the developing world, and is projected to spend $50 billion over the next decade to modernize its military. U.S. arms exporters are eager to get a slice of this lucrative market.

Observers say the United States and Israel could overtake India's traditional defense suppliers, such as Russia, France and Britain, in the years to come.