India and France Monday signed an MoU on purchase of Rafale fighter jets, a delayed multi-billion US dollar arms deal between the two countries, said Indian Prime Minister Narendra Modi and visiting French President Francois Hollande in New Delhi.

"We are very happy that we have formed an agreement for purchasing 36 Rafale aircraft with France," Modi said after meeting with Hollande, who is on a three-day visit here beginning on Sunday.

India and France had agreed upon the deal, the biggest for India in decades in arms purchase, at the end of 2012, but the two sides failed to implement it due to price differences and terms of transfer of technology and production.

Speaking to press following meeting with the French president, Modi on Monday said only the financial details needed to be worked out very soon in finalizing the purchase of the fighter jets from France.

Under the deal, India would purchase 36 Rafale medium multi-role combat aircraft of French aerospace major Dassault, valued at around 8.8 billion US dollars.

"Only financial aspect of the Rafale deal is left. The inter-governmental agreement has been finalized. It will be done soon," said Modi.