In a statement that will create ripples across the border, Defence Minister Manohar Parrikar declared on Thursday India should counter Pakistan-backed cross-border terror attacks with terrorism directed back at Pakistan.

Speaking at the Aaj Tak Manthan conclave in New Delhi on Thursday, Parrikar dropped his bombshell in response to a question about how India would react to another Mumbai-type 26/11 terror attack.

"Rather than reacting to a repeat of 26/11, it would be better not to let such an attack happen. Whatever we have to do, whether it is diplomatic, pressure tactics, or using a thorn to extract a thorn (kaante se kaanta nikalna)," answered Parrikar.

"We have to use terrorists to neutralise terrorists", he said, to applause from the audience.

"(Is this the) first time an Indian defence minister has hinted at covert response to terror attack?" tweeted Sandeep Unnithan, deputy editor at India Today, who was in the audience.

Pakistan consistently says Indian-backed terrorism is responsible for the unsettled state of Baluchistan, a claim that India vehemently rejects. In July 2009, after a meeting between Prime Minister Manmohan Singh and his Pakistani counterpart Yousuf Raza Gilani at Sharm-el-Sheikh, Egypt, the joint statement mentioned Baluchistan and recognised terrorism as the "chief threat" to both countries, leading to Bharatiya Janata Party leaders accusing the government of undermining India's position by equating the victim with the perpetrator.

Separately, Parrikar said clearly for the first time that the 36 Rafale fighters that Prime Minister Narendra Modi requested the French government for during his visit to Paris last month would not be followed by more Rafales. Instead, the money saved by curtailing the Rafale contract would be used to buy large numbers of the indigenous Tejas Light Combat Aircraft (LCA).

"By buying 36 Rafale fighters at a price less than (what was quoted in response to) the earlier tender for 126 aircraft, I have saved the cost of 90 Rafales. We will use that money to buy Tejas LCAs," said Parrikar.

This will address the concerns of aerospace experts, who had questioned the plan to buy 126 Rafales (six squadrons) to take the place of MiG-21 squadrons retiring from service this decade. It has been argued that the Rafale is too heavy, expensive and capable to replace a cheap, light, utility fighter like the MiG-21.

"The Rafale is not meant to replace the MiG-21," said Parrikar, saying he would instead buy large numbers of Tejas fighters, which he said would come cheap at a price of around Rs 150 crore each.

The Indian Air Force (IAF), which currently has 34 fighter squadrons against an assessed requirement of 42 squadrons, will lose during this decade another 7-9 squadrons of MiG-21s and MiG-27s that have already exceeded their service lives.

Yet, the IAF has ordered just 20 Tejas fighters (one squadron) from Hindustan Aeronautics Ltd (HAL), with an additional order of 20 more promised after the fighter achieves final operational clearance, expected in early 2016.

Asked whether he was satisfied with the Tejas' performance, the defence minister replied he was "satisfied to a certain level".

The IAF had accorded performance waivers while giving initial operational clearance to the Tejas, but Parrikar pointed out that none of the waivers affected flight safety.

Asked whether he would deliver on his promise to appoint a tri-service chief of defence staff (CDS) within two months, Parrikar backpedalled somewhat. "By June-end, my proposal will be ready. But it is not my decision per se. It has to go before the National Security Council", he said.