'This systematises ad hoc arrangements for individual defence procurements from the USA entered into by previous governments,' Krishna said.

'I am also a proud Indian. The question of bartering away India's sovereignty does not arise,' he said in response to questions and charges from MPs who demonstrated rare unity cutting across political spectrum, with almost all opposition parties criticising the government move and staging a protest walkout from both houses of parliament.

The end-user agreement, mandatory under a US law to sell sophisticated arms to other countries, will remove a major obstacle in accelerating defence ties between India and the US, the sources said.

The pact will set the pitch for US firms to bid for India's tender for purchasing 126 multi-role fighters. The deal is estimated to be worth $10.4 billion.

Major US defence companies like Lockheed Martin Corp and Boeing Co. are eyeing a pie of India's lucrative defence market.