Aero India 2011 has drawn 675 firms and around 40 official delegations from 45 countries to the southern city of Bangalore, India's aeronautical capital.

The five-day airshow comes less than a month after Indian budget carrier Indigo agreed a $15.6-billion order for 180 A320 passenger aircraft with Europe's Airbus Industries.

Airbus rival Boeing Co. was among the heavyweights in a particularly strong US corporate contingent at the air show, which coincided with a visit to India by US Commerce Secretary Gary Locke.

"We are seeing explosive growth in India's civil aviation sector. India will be requiring more aircraft in the future, and US companies can provide fuel-efficient technologies which would help reduce fares in the country," Locke said in Bangalore on Tuesday.

Seattle-based Boeing Co. predicted Indian airlines could spend $130 billion dollars in the next two decades on acquisitions.

"We estimate India's annual passenger growth at 15 percent in the next five years will be the highest in the whole world," said Dinesh Keskar, president of Boeing's India subsidiary.

As well as the civilian aviation market, global manufacturers are greedily eyeing a raft of military contracts being offered as part of an ambitious upgrade of the Indian air force.

"Today, India's aerospace sector has emerged as the fastest growing in the world," Defence Minister A.K. Antony said in a speech to open the air show.

"We are open to joint ventures, public-private partnerships and licensed production under transfer of technology."

Antony added that India's current defence expenditure -- 2.5 percent of GDP -- was "bound to increase over the next two decades".

Airbus, Boeing, Lockheed Martin Corp. and three other Western firms are all in the running for a $12 billion deal to sell 126 fighter jets to India. The much-awaited contract could to be finalised in July.

"Defence budgets across the world are flat while in India on the other hand it is growing," said Mark Kronenberg, vice president in Boeing's defence unit.

"It (India) is an extremely important destination for us."

Stephen Estill, an executive with Sikorsky said the US-based helicopter-maker was competing for a $800 million dollar project to sell 16 anti-submarine helicopters to the Indian navy.

Trials are likely to begin in April, he said.

India's military spending grew from $12 billion dollars in 2000-2001 to nearly $33 billion dollars in 2010-2011, according to government figures.

International consultancy firm KPMG estimates Delhi will hand out military contracts worth $112 billion dollars by 2016.

The Bangalore show will witness the first public flight of India's homegrown fighter jet, the Tejas, which has taken around 25 years to develop and only recently received operational clearance.

The single-seater, supersonic tactical jet was hyped as a milestone in India's bid to reduce its dependency on military imports, but Antony stressed that self-reliance remained something of a pipedream.

Given the troubled security scenario in South Asia, "we cannot wait till technology is developed in India," Antony said.

"We will be in danger and so we will have to import from outside. We will source from Russia, the US and others, and there will be a level playing field for all," he added.