Seven Indian private companies have been chosen for a first-of-its-kind India-U.S. space and defence collaboration programme, unlocking a lucrative and strategic market for Indian firms, said three sources with knowledge of the matter.

Under the programme, the companies - which the sources said included space imaging company KaleidEO and rocket makers EtherealX and Aadyah Space - will work with the U.S. Defense Innovation Unit, the Department of Defense and other government agencies on satellite observation and emerging space and defence technologies.

In return, they get access to the world’s biggest defence and space market, mentorship and paid clientele as they also work with U.S. defence industry leaders such as Northrop Grumman (NOC.N), RTX (RTX.N), and Lockheed Martin (LMT.N), two of the sources said.

That could give them an edge against the competition as they compete for U.S. business in their niches worth about $1.5 billion annually, the first source said.

The sources spoke on condition of anonymity because a public announcement had not yet been made.

The government bodies did not immediately respond to emails seeking comment. The development and details of the programme have not been made public before, and Reuters was unable to verify the names of all the selected companies.

Lockheed and Northrop declined to comment, while RTX, formerly known as Raytheon, did not immediately respond to an email seeking comment. The Indian firms did not immediately respond to requests for comment.

The India-U.S. Defense Acceleration Ecosystem was launched in 2023 to create an innovation bridge between the two nations. The initiative comes as India pushes to expand its defence and space private industries while reducing its reliance on Russia, its traditional partner.

Indian investor IndusBridge Ventures and U.S.-based FedTech, which established a launchpad in September 2024 under the broader government initiative, selected the seven successful Indian companies and talks are underway about specific projects, the first source said.

Access to the U.S. defence and space market, the largest globally, could be transformative for Indian private players, generating annual revenues between $500 million and $1 billion, the source added.

The second source said the main objective was for companies domiciled in India to be able to work with the U.S. Department of Defence and private industry leaders, as well to gain a foothold into the U.S. commercial space launch market.

Indian National Security Advisor Ajit Doval this month met with his U.S. counterpart Jake Sullivan in New Delhi to discuss space technology collaboration and the “deepening cooperation between the U.S. Defense Innovation Unit and India’s Innovations for Defense Excellence to accelerate the adoption of cutting-edge commercial technologies for military solutions,” among other topics.