India and Saudi Arabia will sign a defense cooperation pact during the visit of Crown Prince and Defence Minister Salman Bin Abdulaziz to New Delhi next month, according to local media reports Thursday.

"The proposed memorandum of understanding (MoU) for defence cooperation will be signed during the visit of Crown Prince Salman to New Delhi sometime in February this year," Indian Finance Minister P. Chidambaram said.

Saudi Arabia is also India's largest oil provider and hosts a large number of expatriate Indians.

Chidambaram, who held talks with the Crown Prince during his two-day stay in the Saudi capital, said the Kingdom and India " have been able to make significant progress in relationship over the past few years."

The two sides have also resolved to "enhance cooperation in exchange of information relating to terrorist activities, money laundering, narcotics, arms and human trafficking.