Defence Minister Manohar Parrikar and his French counterpart Jean Yves LeDrian signed the contract in Delhi on Friday after years of tortuous negotiations between the two countries.

India will pay about Rs 58,000 crore or 7.8 billion Euros for 36 off-the-shelf Dassault Rafale twin-engine fighters. About 15 per cent of this cost is being paid in advance.

India will also get spares and weaponry, including the Meteor missile, considered among the most advanced in the world.

Sources tracking the final negotiations had confirmed to NDTV that the IAF's Rafales will come equipped with the Meteor designed to knock out enemy aircraft and cruise missiles significantly more than 100 km away.

The acquisition of this weapon is likely to be game changer in South Asia. Neither Pakistan nor China, India's traditional military adversaries, possess a weapon of the same class. "Rafale is a potent weapon which will add to the capability of IAF," Defence Minister Mr Parrikar said.

The first Rafale warplanes are slated to be delivered roughly within 18 months of the signing of the final contract.

There is an accompanying offset clause through which France will invest 30 per cent of the 7.8 billion Euros in India's military aeronautics-related research programmes and 20 percent into local production of Rafale components.

The deal could not be signed this January when French President Francois Hollande was the Chief Guest for the Republic Day because India wanted a better price.

For the Indian Air Force, the deal is bitter-sweet. On one hand, they will be getting two squadrons of the state-of-the-art fighter, on the other hand, the original requirement was for at least 126 jets.