Taiwan ranked second with USD 2.7 billion arms purchases followed by Saudi Arabia and Pakistan.
Though Russia continued its dominance of the Indian arms market, the Congressional report said New Delhi had begun to diversify its weapons supply base, acquiring high technology systems from Israel, France as well as the US.
The report said that the US ranked first in arms transfer agreements with developing countries followed closely by Russia which sold arms worth USD 7.8 billion.
The value of all arms transfer agreements worldwide in 2010 was USD 40.4 billion.
"This was a substantial decrease in arms agreements values over 2009 of 38.1 per cent, and the lowest worldwide arms agreements total since 2003," the CRS said.
CRS said sales of advanced weaponry in South Asia by Russia have been a matter of ongoing concern to the United States because of long-standing tensions between Pakistan and India.
CRS said despite the volatility of the international economy in recent years, some nations in the Near East and Asia regions have resumed or continued large weapons purchases. These purchases have been made by a limited number of developing nations in these two regions.
"Most recently they have been made by India in Asia, and Saudi Arabia and the United Arab Emirates in the Near East. For the larger group of developing nations in these regions, the strength of their individual economies appears to be the most significant factor in their decisions to make major arms purchases," it said.
"One key US policy objective is preventing a potentially destabilising arms race in this region. To that end, the United States has recently expanded its military cooperation with and arms sales to India," it said.
Among the most significant arms transfer agreements Russia made in 2010 were with India for 29 MiG-29K fighters for USD 1.5 billion. Algeria purchased 16 Su-30 MKI fighters and Uganda 6 Su30 MK2 fighters for a collective value of over USD 1.2 billion.
India has begun to diversify its weapons supply base.
"In 2008 India purchased six C130J cargo aircraft from the United States. In 2010, the United Kingdom sold India 57 Hawk jet trainers for USD 1 billion. In 2010 Italy also sold India 12 AW101 helicopters," it said.
"This pattern of Indian arms purchases indicates that it is likely that Russia will face strong new competition from other major weapons suppliers for the India arms market, and it can no longer be assured that India will consistently purchase its major combat systems," the report said.