French President Francois Hollande says his government is considering an agreement with New Delhi that would clear the way for a long-awaited $US9 billion ($A12.9 billion) sale of French-built Rafale warplanes to India.
Hollande arrived in India on Sunday.
During his visit he will try to close the defence deal and to push forward with nuclear and solar energy agreements, including a plan to build six French nuclear reactors in western India.
India's Prime Minister Narendra Modi has been trying to attract French companies to India and to share high technology in defence and other fields as part of a bid to promote local industry and build a domestic manufacturing base.
In the run-up to Hollande's visit, Indian and French negotiators debated the price of the 36 combat planes designed to replace ageing Indian air force jets, officials of the two nations said.
"The idea we have in mind is the one of an intergovernmental agreement between the two countries in order to allow the firms involved to go all the way," Hollande told journalists.
"It is this intergovernmental agreement that will allow a commercial transaction."
The French leader, speaking in Chandigarh, a city designed by French architect Le Corbusier, said such an agreement was a prerequisite for the Indian side.
He did not elaborate.
Hollande will be the guest of honour at India's Republic Day parade on Tuesday, a sign of the deepening political and commercial ties between the two countries.
