India and Bangladesh signed their first defence contract under the $500 million line of credit (LoC), which was extended by India. India will supply defence gear under this contract. Bangladesh military is also apparently eyeing military hardware from India in the long run.  Currently Chinese equipment forms the bulk of Bangladesh defence hardware. According to a recent report of the Stockholm International Peace Research Institute, 47% of China’s weapon exports goes to its closest ally, Pakistan, while China’s next largest clients were Bangladesh (16%) and Thailand (5%) respectively. India’s push for local defence manufacturing gives it the comparative advantage to try and capture foreign markets in South and Southeast Asia. India is now being only one of a handful of nations with an indigenous carrier program.