Negotiations with India on the purchase of 36 Rafale fighter aircraft built by French company Dassault may take time to conclude, French President Francois Hollande indicated Sunday.

Hollande, who is on a three-day trip to India, is the guest of honour at the Republic Day military parade in New Delhi on Tuesday and will hold talks with Prime Minister Narendra Modi in the Indian capital Monday.

Speaking at a meeting of business executives from both countries in the northern city of Chandigarh, the two leaders said cooperation on counter-terrorism and clean energy were on their agenda for discussion, along with the push for the jet deal.

Hollande told reporters in Chandigarh that further negotiations were needed on the Rafale deal.

"The contract can only be signed after the inter-governmental agreement. It was the wish of our Indian friends that this will allow the commercial agreement," Hollande said.

"The inter-governmental agreement is going to be discussed on this trip," Hollande added. Such a pact was expected to provide a framework within which the commercial agreement could be concluded.

The deal for the jets is estimated to be worth 9 billion dollars. Negotiations on the deal were at an advanced stage, Indian Foreign Ministry spokesman Vikas Swarup had said earlier.

Indian and French companies also signed 16 pacts largely related to development of three smart cities in Chandigarh, Puducherry - a former French colony - and Nagpur, other urban and solar power development projects and manufacture of helicopters in India.

The pacts were signed at the business summit in Chandigarh. The city was planned by the Swiss-French architect Charles-Edouard Jeanneret-Gris, also known as Le Corbusier in the late 1950s.

The city was put under unprecedented security cover for the visit, especially in view of a terrorist attack on an air force base in the region earlier in January.

At the summit, both Modi and Hollande spoke about the need to combat terrorism in the context of recent attacks in both countries.

"Both countries have been hit. So together we will increase our exchanges, cooperation between services and act to reinforce our military equipment. It is part of the agenda for this trip," Hollande said.

Referring to the invitation to French troops to march in India’s Republic Day parade, Hollande said: "It is the best symbol to illustrate the relations between France and India."

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