France and India have signed an intergovernmental agreement for the purchase of Rafale combat aircraft manufactured by France's Dassault Aviation.
Under the agreement, France will supply 36 Rafale fighter jets to India as part of the long-awaited medium multi-role combat aircraft (MMRCA) contract, which is expected to be worth more than $20bn.
A statement by Dassault Aviation said: "Dassault Aviation is very pleased with this progress, and is actively supporting French authorities in their efforts to finalise a complete agreement within the next four weeks."
The Indian Air Force (IAF) was originally expected to buy 126 Rafale aircraft, with the first 18 jets to be manufactured in France from the second quarter of 2015 onwards, while the remaining 108 were to be locally built following a technology transfer to Hindustan Aeronautics Limited (HAL).
However, the countries could not reach an agreement due to disagreements over Dassault's refusal to provide guarantees for the fighters built in India.
Additionally, France's Safran dropped the plans to collaborate with India's state-owned Hindustan Aeronautics to make engine parts for the aircraft, after the country scaled down its requirement.
The new MMRCA aircraft is expected to serve as the mainstay of the IAF fighter aircraft fleet for the next 40 years and will replace its existing fleet of MiG variants.
Powered by two SNECMA M88 engines, Rafale is a delta-wing multi-role jet fighter designed to conduct air-to-air combat, reconnaissance flights and nuclear bombing missions.
The aircraft is capable of carrying anti-ship and air-to-air and air-to-ground missiles. It is in use with the French Navy and Air Force, and has also been ordered by Egypt.