U.S. Defense Secretary Leon Panetta promised today to let India buy America’s best weapons technology and jointly produce and develop equipment in a bid to increase trade with the world’s top arms importer.

“The United States is firmly committed to providing the best defense technology possible to India. We are both leaders in technology development and we can do incredible work together,” he said on a visit to the Indian capital.

New Delhi and Washington are close partners on defense issues with some $8 billion of arms sales under their belts, moving past decades of distrust, although the United States lost out on a major fighter jet deal this year after offering old technology.

“We must move beyond a focus on individual arms sales to regular cooperation that increases the quantity and quality of our defense trade,” he said, adding that Washington was moving to reform export controls that have limited weapons transfers to India.

Panetta also called on New Delhi to modernize its defense procurement rules and nuclear liability legislation and said the Pentagon would work with Indian leaders to cut red tape and speed up defense sales.

“I think close partnership with America will be key to meeting India’s own stated aims of a modern and effective defense force,” he said.

The friendship between the world’s two largest democracies is viewed with caution from Beijing, where some in government fear India is part of a U.S. strategy to limit China’s rise on the world stage. India is spending about $100 billion over 10 years on modernizing the military, in large part with an eye on China.

Panetta noted that India and the United States both see China as having “a critical role to play advancing security and prosperity in this region.”

“The United States welcomes the rise of a strong, prosperous and a successful China that plays a greater role in global affairs - and respects and enforces the international norms that have governed this region for six decades,” he said.