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The acquisition of the 10 nuclear-capable Mirages was discussed by the Defence Acquisition Council, the apex body in the defence ministry which looks into the purchase of weapon systems, the Indian Express reported.
The Mirage 2000-5 is a multi-role combat aircraft which is technically superior to Mirage 2000s which New Delhi already has, the report said.
Qatar bought the aircraft from France in 1998 but has decided to sell them, the report said.
Indian Deputy Prime Minister Lal Krishna Advani had discussed the issue with officials in Doha during a stop-over visit in January.
The IAF also sent a team to evaluate the aircraft, which found them "nearly brand new."
The report said New Delhi was particularly interested in the deal as Islamabad's acquisition of the 10 Mirage 2000-5 could blunt the IAF's current technical superiority over the Pakistan Air Force.
New Delhi was also awaiting the delivery of an additional 10 Mirage 2000s from France's Dassault Aviation, which is expected in mid-December, the report added.
India's air force fleet consists mainly of the Russian designed MiG-21 jets which have acquired the dubious name of "flying coffins" because of frequent crashes involving the aircraft.
The IAF, the world's fourth largest, has lost at least 273 MiGs, worth tens of millions of dollars, in crashes between 1991 and 2003, killing more than 100 pilots, according to official figures.
The IAF also has some British-made Jaguars, besides Mirage 2000s from France.
In 1997, the IAF inducted a handful of state-of-the-art Sukhoi fighter jets bought from Russia.
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