The 2018 National Defence Authorisation Act (NDAA) sailed through both the chambers of the Congress House of Representatives and the Senate by a voice vote.
It now heads to the White House for President Donald Trump to sign it into law, which he is expected to do before the Thanksgiving holidays.
The budget also imposes tougher conditions on Pakistan for military and security assistance and accommodates last minute additional White House's financial request implementing its new South Asia strategy.
The NDAA-2018 asks the Secretary of State and the Defence Secretary to come out with a common definition that recognises India's status as a "Major Defence Partner".
Welcoming the move, top Republican Senator Ted Cruz said few partnerships in the 21st century carried more strategic significance than the US-India partnership.
During the legislative process, Cruz secured an amendment that calls on the Department of Defence to reassess its approach to partnering with India and to appoint an individual to oversee this process.
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