India will produce the hi-tech Russian Sukhoi-30 MKI fighter jet from 2004.

The Indian ambassador to Russia, Krishnan Raghunath, told Russian news agency Tass that 120 planes would be produced under licence in a $3bn (�1.9bn) deal.

Russian President Vladimir Putin is due to visit India in December where military co-operation and the technology transfers will be negotiated.

India has been a long term customer for Sukhoi planes and has spent years negotiating to produce them domestically.

In 2000, India and Russia signed a deal to allowed Indian firms to build the Su-30 MKI under licence, but it has been delayed by the technology transfer.

The nuclear armed country has been trying to boost production of hi-tech weaponry and last month dropped a blacklist of countries to which it would not export arms.

Arms dealing

Apart from the Su-30 deal, the production of T-90 tanks and the sale of Russia's Admiral Gorshkov aircraft carrier to the Indian Navy are also expected to be discussed in December.

Russia is the biggest supplier of arms to India, accounting for up to 25% of annual exports of military equipment.

In September India took delivery of the first 10 of Sukhoi Su-30 MKIs from Russia.

The Irkutsk Aviation Industrial Association will deliver a further 12 during 2003, with the final batch of 10 to be delivered in 2004.

Analysts say the Su-30 will become the mainstay of the Indian air force for the next 25 years.