US, India sign military logistics agreement, as Secretary of State John Kerry arrives in Delhi

US Secretary of Defence Ash Carter meets India's Defence Minister Manohar Parrikar for a bilateral at the IISS Shangri-La Dialogue in Singapore on June 4, 2016.
US Secretary of Defence Ash Carter meets India's Defence Minister Manohar Parrikar for a bilateral at the IISS Shangri-La Dialogue in Singapore on June 4, 2016.PHOTO: REUTERS

WASHINGTON (Reuters) - The United States and India have signed an agreement to share military logistics, they said in a joint statement on Monday, a step towards building defence ties as both countries seek to counter the growing maritime assertiveness of China.

The accord allows the two militaries to use each other's land, air and naval bases for resupplies, repairs and rest.

US Defence Secretary Ash Carter and Indian Defence Minister Manohar Parrikar reached an agreement "in principle" in April, but had yet to finalise the details.

The news came as US Secretary of State John Kerry arrived in India on Monday for talks on ambitious plans to hike trade between the world's two largest democracies five-fold to around US$100 billion ($136 billion).

Kerry will meet with Prime Minister Narendra Modi during the two-day visit to the capital New Delhi and take part in a "strategic dialogue" between the two nations.

Kerry arrived from neighbouring Bangladesh where he held talks with Prime Minister Sheikh Hasina on efforts to combat extremism following a recent series of deadly attacks.

US President Barack Obama and Modi launched the "strategic and commercial dialogue" in 2015 in efforts to deepen security and economic cooperation.

US Commerce Secretary Penny Pritzker, who will take part in this week's talks, has said the idea of increasing trade from US$100 billion to US$500 billion was ambitious.

A US State Department senior official said India needed to further reform its economy if the two nations were to achieve their goal.

"Clearly for two-way trade to reach that level, much needs to happen in terms of trade and economic reforms, and we have seen some movement in that direction," the official said ahead of Kerry's visit.

Modi pledged to reform India's economy after winning landslide elections in 2014 to attract much-needed foreign investment and boost growth.

But some investors have since been frustrated by the pace of reform, although they welcomed the government's recent progress to introduce a single national sales tax to replace a myriad of levies.

India is the world's fastest growing major economy, expanding by 7.9 percent in the fourth quarter of 2015-2016.