Carter also hinted that a new project announcement may come during his visit to India next week, during which he will visit New Delhi and Goa.
"While in India, I will meet with Prime Minister [Narendra] Modi and Defense Minister [Manohar] Parrikar to discuss the progress we have made together in aircraft carrier, jet fighter, and jet engine collaboration," Carter said in prepared remarks at the Council for Foreign Relations in New York. "And we will talk about exciting new projects, the details of which I cannot go into this afternoon, but stay tuned for when I'm with Minister Parrikar."
Carter said such discussions were happening under the aegis of the Defense Technology and Trade Initiative (DTT), a 2012 agreement between the US and India focused on sharing technology in what he called an "unprecedented way."
"Members of my team, and industry, are right now, as we are here in New York, in India looking at the potential coproduction of fighter aircraft," Carter said. "These conversations represent the growing enthusiasm of the US-India partnership, and even more than that, its promise. While these negotiations can be difficult and global competition is high, I have no doubt that in the coming years, the United States and India will embark on a landmark co-production agreement that will bring our two countries closer together and make our militaries stronger"
A US defense official confirmed that the discussion centered on the Lockheed Martin F-16V and Boeing F/A-18 fighter designs.
"Lockheed Martin's F-16V and Boeing's F/A-18 proposals to produce their aircraft in India to meet PM Modi's 'Make in India' initiative," the official said, adding that the Indian Ministry of Defence "was briefed this week by a joint US government/industry team on the fighter aircraft co-production proposals."
Both companies confirmed that they are in ongoing discussions with Indian authorities.
"Lockheed Martin is in discussions with the U.S. Government, the Government of India, and our Indian industry partners about potential new production F-16 aircraft to address India's fighter recapitalization requirements," Lockheed spokesman Joe LaMarca wrote in an email. "Details about the aircraft and industrial offer will be determined in conjunction with the respective governments, Lockheed Martin, and Indian industry."
LaMarca pointed to the partnership between Lockheed and Indian industrial giant Tata on the coproduction of the C-130 as an example of how a coproduction deal could potentially work.
However, a deal was never consummated, and in July the Indian government cancelled the MMRCA program outright in favor of a government-to-government discussion. That gave new life to the American competitors, at a time when the Obama administration has made strengthening ties with India a priority.
The defense official called the discussions "essentially an unofficial recompete of India's Medium Multi Role Combat Aircraft program."
Aaron Mehta was deputy editor and senior Pentagon correspondent for Defense News, covering policy, strategy and acquisition at the highest levels of the Defense Department and its international partners.