The contract comes under the new enhanced Indo-U.S. strategic partnership highlighted by a bilateral defense pact for modernizing India's military signed last month during U.S. Secretary of State Hillary Clinton's visit. The pact's end-use monitoring clause complies with a U.S. law calling for inspection to ensure U.S. technology does not pass on to third parties.

The final requirement prior to proceeding with the P-8I contract, the largest India has ever signed, was the technical assistance agreement, which the Times of India reported was made final by the two countries earlier this month. The agreement, requiring the United States to provide support and maintenance for the planes, allowed the Boeing contract signed seven months ago to "become effective," the report said.

The contract is also a major boost for the U.S. aircraft maker in these recessionary times. It also comes at a time when Boeing is contending with other global competitors including Lockheed Martin for the far bigger $11 billion to $12 billion Indian air force contract for 126 medium multirole combat aircraft.

The P-8I, a military derivative of Boeing's highly successful 737, is a long-range anti-submarine, anti-surface warfare, intelligence, surveillance and reconnaissance aircraft, which the company says is capable of broad-area, maritime and littoral operations.

The P-8I is a variant of the P-8A Poseidon, which Boeing is developing for the U.S. Navy. The aircraft "combines superior performance and reliability with an advanced mission system that ensures maximum interoperability in the future battle space," the company says. Each of its two CFM56-7 engines is designed to provide 27,300 pounds of thrust, and the plane's maximum takeoff gross weight will be about 187,700 pounds.

What is significant is that the Indian navy is the first international customer for the P-8I. The first of the eight planes is expected to be delivered to India sometime in 2013 and the other seven by 2016.

The Times of India reported the P-8I will be equipped with torpedoes, depth bombs and Harpoon missiles. They will replace the eight aging Russian Tupolev-142M turboprops.

Boeing says in addition to the eight, there are long-term prospects for more Indian orders. The plane will be built in Boeing's production facility in Renton, Wash. The 737 fuselage will be built by Spirit AeroSystems in Wichita, Kan.

"This aircraft will provide outstanding capabilities tailored to India's unique maritime-patrol requirements," a January company statement said quoting Jim Albaugh, president and CEO of Boeing Integrated Defense Systems with headquarters in St. Louis.

Other Boeing officials have been quoted as saying the P-8I will be able to meet the Indian navy's requirements for several decades.

The signing of the India-U.S. defense pact did not go unnoticed by China, whose growing military might and close ties with Pakistan are a matter of concern for India.

The official Xinhua news agency in a long article said U.S. arms sales to India have been increasing steadily with more and more advanced weaponry shipped to New Delhi.

The article said for Washington policymakers, a closer military relationship with India will serve multiple purposes, foremost among them being that Washington regards India as a vital balancing force in Asia, where several emerging powers exist. The article said some U.S. officials have also discussed the idea of an Asian version of NATO to include the United States, India, Japan and Australia.

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