India and France are all set to sign the Rafale fighter jet deal today.
French defence minister Jean Yves Le Drian arrived in New Delhi on Thursday night for signing of the 7.8 billion deal for 36 Rafale jets.
The Rafale fighter jets will come equipped with latest missiles and weapon system giving Indian Air Force (IAF) a cutting edge over arch rival Pakistan.
It will be the first fighter jet deal for India in last 20 years.
According to defence ministry sources, the deal will be signed in the presence of Indian defence minister Manohar Parrikar and French defence minister Jean Yves Le Drian.
Also present will be the chief executive officers (CEOs) of top French companies, including Dassault Aviation, the makers of Rafale.
The deal comes with a saving of nearly 750 million than the one struck during the previous UPA government, which was scrapped by the Narendra Modi government, besides a 50 per cent offset clause.
These combat aircraft, delivery of which will start in 36 months and will be completed in 66 months from the date the contract is inked, come equipped with state-of-the-art missiles like 'Meteor' and 'Scalp' that will give IAF a capability that had been sorely missing in its arsenal.
The features that make the Rafale a strategic weapon in the hands of IAF is its Beyond Visual Range (BVR) Meteor air-to-air missile with a range in excess of 150 km.
Its integration on the Rafale jets will mean IAF can hit targets inside both Pakistan and across the northern and eastern borders while staying within India's territorial boundary.
Pakistan at present has only a BVR with 80 km range. During the Kargil war, India had used a BVR of 50 km range while Pakistan had none.
However, Pakistan later acquired 80-km-range BVR, but now with 'Meteor' the balance of power in the air space has again tilted in India's favour.
'Scalp', a long-range air-to-ground cruise missile with a range in excess of 300 km also gives IAF an edge over its adversaries.
Sources said the "vanilla price" of just the 36 aircraft is about 3.42 billion. The armaments cost about 710 million while Indian specific changes, including integration of Israeli helmet-mounted displays, will cost 1,700 million.
The rest of the cost includes spare parts and maintenance.
(With PTI inputs)