Analysts suggest that the decision could give U.S. companies vying for multimillion-dollar defense contracts in India a strong boost. Among the companies: Lockheed Martin and Boeing, which are competing for F-16 and F-18 deals, respectively.

During his trip to India, Obama announced a relaxation in export controls for India in an attempt to reduce barriers on commercial companies that could potentially have military applications.

Obama announced the U.S. support for India's council bid during an address to the Parliament earlier this week.

"In the years ahead, I look forward to a reformed U.N. Security Council that includes India as a permanent member," Obama told India's Parliament.

U.S. companies are also vying for a $10 billion Medium Multirole Combat Aircraft. Indian military officials have indicated that the final pick would stem from a political decision.

In recent years India has won access to atomic fuels and technology after an accord clinched with President George W. Bush resulted in the 45-member Nuclear Supplier Group lifting a three-decade ban on exports.

Obama's decision to relax exports control marked "an incremental advancement in U.S. and India relations," said S. Chandrasekaran, director of the South Asia Analysis Group, a policy-research organization in India. "This is good news for India in that it will give them better access to more sophisticated technology."

India intends to spend up to $30 billion on its military by 2012. In recent months, also, it inducted a long-range, nuclear-tipped missile into its armed forces, unveiling a defense spending budget spiked by 24 percent since last year.

The moves have Pakistan fretting, with leading officials billing India's drive a "massive militarization."

Bent on bolstering its military might, India has also boosted its defense ties with Russia. In a related agreement, officials in Moscow say they are waiting for clearance from New Delhi to supply the country with 22 attack helicopters and 15 heavy lift helicopters.

During Obama's visit six bilateral agreements and four memorandums of understanding were signed, including one related to the creation of a global center for nuclear energy partnership.

As Asia's third biggest economy, India offers a rapidly growing market for American companies, including the Arkansas retailer Wal-Mart Stores and the Connecticut's GE, the world biggest maker of jet engines, power plant turbines and locomotives.

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