The contract envisages joint development of preliminary design contract (PDC) for the advanced fighter jet and will involve Hindustan Aeronautics Ltd (HAL) from India and the Sukhoi Design Bureau and Rosoboronexport on the Russian side.
The pact was signed on the margins of a meeting between Prime Minister Manmohan Singh and Russian President Dmitry Medvedev, during which the two sides also discussed their defence relationship which is transforming from a buyer-seller format to one that includes joint research and development, manufacturing and marketing activities.
According to reports, the deal is expected to be worth over USD 295 million and the design of the aircraft is likely to be finalised within next 18 months.
The Indian Air Force (IAF) has plans of acquiring 250-300 of these aircraft by the year 2030. Single and twin seat versions of the aircraft are expected to be developed and the plane will be ready for flying by 2017.
The FGFA would be based on Sukhoi''s T-50 aircraft, which made its maiden flight in January this year.
During their meeting, the two leaders also expressed satisfaction at the regular service-to-service interactions and joint exercises that have taken place between their countries.
The two sides also agreed to make efforts to upgrade joint military exercises in various fields including counter- terrorism.
Since the Cold War era, Russia has been the biggest military hardware supplier to India and the Indian armed forces rely heavily on that country.
Though India has been working to diversify its military imports, still the bulk of the hardware with the three defence forces is of Russian origin including frontline Su-30 MKI fighter aircraft and T-90 and T-72 tanks.