With an attempt to reduce military dependence on expensive imports, New Delhi would seek to manufacture 200 Kamov-226T helicopters in a joint venture with Moscow.
The Prime Minister, who heads for Moscow on December 23, will also offer Russia a site in Andhra Pradesh to build six nuclear reactors of 1,200 megawatts each, which will be an addition to the six that Russia is already constructing in Tamil Nadu.
New Delhi has turned to Moscow as the US firm General Electric and Westinghouse, a US-based unit of Japan's Toshiba , are still weighing an entry into India's nuclear energy sector because of a law that makes reactor suppliers liable in case of an accident.
Moscow, which has maintained close ties with India since the Cold War, has in recent years slipped behind the United States and Israel in securing orders in the Indian defence market, estimated to be worth USD 130 billion over the next seven years.
Now Russian President Vladimir Putin is banking on India's drive to manufacture at home to regain market share.
Under an inter-government agreement to be signed during the Prime Minister's trip, Moscow would set up a production line for the light helicopters that would supply the Indian military and Russia too.
India's state-run Hindustan Aeronautics and Anil Ambani's Reliance Defence are in the running as local partners for the deal for the 200 twin-engined helicopters, estimated at USD one billion, to replace India's ageing fleet of Cheetah and Chetak helicopters.
India is also turning to Russia to secure overseas energy assets to help fuel its economy.
Indian Oil Corp and Oil India, both state-owned, are in talks with Russia's Rosneft to buy up to 29 percent stake in a Siberian oil project. (ANI)