State-owned Israeli Aircraft Industries will also supply military surveillance hardware for the unmanned aircraft which will be jointly produced in India, defence ministry officials said.

"We are quite close to signing a deal," a highly-placed official said.

They said the offer includes 50 Eagle-Heron Israeli drones which have a range of 1,000 kilometres (620 miles), can stay airborne for more than 24 hours and cruise at an altitude of 25,000 feet (7,575 metres).

India, which treated Israel like a pariah for decades, has forged close military links in recent years. It is acquiring two Phalcon Airborne Early Warning Systems worth a billion dollars and will jointly produce a long-range missile from the Jewish state.