India's plan to buy 126 multirole combat aircraft (MMRCA), originally estimated to cost $10bn, will be delayed by another year and will cost an additional $1bn-$2bn.
The Indian Air Force (IAF) is still conducting technical evaluations of fighter jets and will take another few months before making a final decision on the winner, according to the Economic Times.
Shortlisted firms, including Boeing and Lockheed Martin, will have to resubmit their bids, following the expiry of the original deadline.
The government, which had accepted bids for the programme two years ago, expects to complete the acquisition by 28 April 2010.
India will acquire the MMRCAs to replace its aging fleet of Russian MiG jets.