The US State Department has approved the potential sale of 31 armed MQ-9B SkyGuardian drones, related missiles and equipment to India for nearly $4 billion, the Pentagon said on Thursday.
India has long expressed interest in buying large, armed drones from the United States, but bureaucratic stumbling blocks hampered a hoped-for deal.
Talks over an armed version for India date back to 2018, while discussions over unarmed versions date back even further.
Thursday's approval by the State Department does not mean the deal is a sure thing, but demonstrates progress as the US continues a campaign to coax India away from buying Russian military equipment.
The State Department nod signals that the deal likely has cleared one stumbling block - approval by leaders of US congressional committees.
Senator Ben Cardin, a Democrat who chairs the Senate Foreign Relations Committee, said he had ended his "hold" on the agreement now that President Joe Biden's administration had agreed to fully investigate an Indian assassination plot on US soil.
"The (Biden) administration has demanded that there be investigation and accountability in regards to the plot here in the United States, and that there is accountability within India against these types of activities," Cardin told reporters.
Ahead of Indian Prime Minister Narendra Modi's state visit to Washington last June, before the plot was uncovered, the Biden administration had pushed New Delhi to cut through its own red tape and advance a deal.
Currently, India is leasing a few MQ-9Bs as part of an intelligence-gathering operation.
The deal includes sophisticated communications and surveillance equipment, 170 AGM-114R Hellfire missiles and 310 Laser Small Diameter Bombs, a precision glide bomb.
General Atomics Aeronautical Systems will be the principal contractor, the Pentagon said. The Pentagon's Defence Security Cooperation Agency notified Congress of the possible sale on Thursday.

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