A deal had hoped to be signed in January during the visit of French president Francois Hollande, but India had balked at the original price seeking a better deal.
The French firm, Dassault Aviation, will manufacture the jets and in a press release Friday, Chairman and chief executive Eric Trappier welcomed the news.
"I am honored and delighted by the decision of the Indian Authorities which gives new impetus to our partnership for the coming decades and I thank them for their confidence," the statement read.
Trappier also used the release to highlight India's stature within world politics.
"I am certain that the Rafale and its performance will hold high the colors of the Indian Air Force. It will demonstrate unstinting efficiency in protecting the people of India and the sovereignty of the world's largest democracy."
Dassault said the first Rafale warplanes are slated to be delivered roughly in the next 18 months of the signing of the final contract.
As part of the deal, France is to invest 30 percent of the 7.8 billion euros in India's military aeronautics programs.
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