Talks between India and Vietnam over the sale of four Indian navy patrol vessels are gathering pace, according to Reuters news agency.
The ships will be provided to Vietnam under a $100m (£62m) defence credit line and show New Delhi's willingness to push back against Beijing's increasing assertiveness in the South China Sea.
"We expect to see progress on this fairly early as negotiations are continuing between the Vietnamese and our defence suppliers," an Indian government official involved in discussions said, as quoted by Reuters.
Vietnam's prime minister had called for India to involve itself in territorial disputes in the South China Sea, ahead of a bilateral meeting with his Indian counterpart in New Delhi.
Nguyen Tan Dung told the Press Trust of India that the whole region should be involved in "the proper settlement of disputes" in the contested waters. "Vietnam hopes that India, as a major power in the region and the world, will actively support the parties concerned to peacefully resolve all disputes," Dung told the state-run media company.
Vietnam is seeking help from other regional powers in a bid to restrain China from using its significant military power in the scramble for resources in the mineral-rich South China Sea.
China claims almost all of the sea for itself, bringing it into dispute with a number of countries that also claim parts of the sea for themselves.
China and Vietnam clashed in the South China Sea during the summer, after China deployed a massive oil rig in waters close to the Paracel islands in May. The two countries declare ownership of the waters, and the counties' navies had skirmishes, both sides reporting that the other had rammed their ships.
The maritime clashes sparked a wave of anti-China riots on mainland Vietnam, resulting in a number of deaths and millions of dollars' worth of damage to factories in some of the country's industrial parks.
While Beijing and Hanoi have since reconciled, tensions remain over China's perceived designs on the South China Sea.
While annual trade between the two Communist countries surpassed $50bn in 2013, Dung arrived in India seeking to boost economic links with the other great regional power.
"We expect to see progress on this fairly early as negotiations are continuing between the Vietnamese and our defence suppliers," the government official involved in discussions said.