Crowds cheered as officials staged a grand farewell for the final two MiG-21 squadrons, totalling around 36 aircraft, at an air force base in the northern city of Chandigarh.

The send-off came a day after New Delhi signed a $7-billion deal to acquire 97 domestically designed and built Tejas jets as it seeks to modernise its Soviet-era fleet.

The farewell ceremony included a mock dogfight between Russian MiGs and a colourful display by the Surya Kiran aerobatic team.

The retired jets will likely be put up for public display, though the government has yet to announce any plans.

Defence minister Rajnath Singh, senior air force officials, including veterans who piloted the MiG-21, watched as the storied aircraft made their last pass.

First inducted in the 1960s, India operated a staggering 874 MiG-21s.

Plans to retire them in the 1990s were repeatedly delayed amid local production setbacks, bureaucratic obstacles and corruption scandals.

"MiG-21's legacy is undeniable. It was a capable -- if flawed -- fighter that formed the Indian Air Force's backbone for decades," former Air Marshal Raghunath Nambiar told AFP on the sidelines of the event.

He credited a key MiG-21 bombing campaign for hastening India's victory over Pakistan in the 1971 war that led to the creation of Bangladesh.

But age caught up with the Soviet-era jet.

- 'Flying coffin' -

"Designed for simplicity, the MiG-21 was meant to be rugged but faltered as it aged," Nambiar said.

Engine flameouts, hydraulic failures, and electrical faults were frequent and with no backup systems, emergency landings and ejections became all too common, he added.

The MiG-21's grim reputation earned it the infamous "flying coffin" moniker in its later years.

Over roughly 40 years, 482 MiG crashes were recorded, claiming the lives of 171 pilots in India as of 2012, according to defence ministry figures.

"It's time to let it go -- not as a flawless icon, but as a sobering reminder of the sacrifices made by those who flew it," Nambiar said.

With the MiG-21's retirement, India, the world's fifth-largest economy, is set to intensify its push for domestic arms production and new international partnerships.

In April, India signed a multi-billion-dollar deal to purchase 26 Rafale fighter jets from France's Dassault Aviation. They will join 36 Rafale fighters already acquired.

India is also working with a French company to develop and manufacture fighter jet engines at home.

Angad Singh, co-author of a book on the MiGs, told AFP the country faced an "unenviable position" given its current fighter shortfall.

He, however, added that India was putting its full weight behind the improved Tejas aircraft and was in talks to buy another 114 Rafales.

Regional security concerns loom large for India, especially after an intense four-day clash with arch-rival Pakistan in May, their worst standoff since 1999.

Both sides claimed victory, each boasting of downing the other's fighter jets.