India has decided to buy 126 fighter jets from French firm Dassault in a $11 billion deal that is one of the world's largest arms contracts.
Indian government officials, who spoke on the condition of anonymity, told reporters Tuesday that Dassault was the lowest bidder and beat out the Eurofighter consortium to clinch the contract.
Further negotiations were expected to take place before India finalizes the agreement to buy Dassault's Rafale fighter jet.
French President Nicolas Sarkozy welcomed news of the deal and said the talks would begin "very soon."
James Hardy, Asia Pacific editor of Jane's Defense Weekly, said Dassault has been selected as the preferred bidder, but that "this means nothing" until the contract is signed.
In April, India rejected bids from U.S.-based Boeing and Lockheed Martin, as well as bids from Russian and Swedish firms.
Under the deal, 18 fighter jets will be delivered ready-made, while 108 jets will be built in India.
India is the world's largest arms importer and is spending billions of dollars to upgrade its defense capabilities, with an eye on rival Pakistan to the west and China to the east.
French Defense Minister Gerard Longuet had warned in December that production of the Rafale jet could be stopped if foreign buyers were not found.
Some information for this report was provided by AP, AFP and Reuters.