India said on Friday it was gearing up to seal military contracts worth billions of dollars including a massive fighter jet deal which has prompted a dogfight among global aeronautical giants.

India's move to buy 126 fighter jets worth 12 billion dollars was in its final stages with evaluations of six shortlisted aircraft set to begin next year, Air Chief Marshal Fali Major told a news conference.

"A number of projects now are reaching a conclusion," Major said in New Delhi, referring to contracts due to be awarded.

"The Indian air force is in a state of transformation and we are on the way to modernisation," he said.

US-based Boeing and Lockheed Martin, Russian MiG, Sweden's Saab and French Dassault are vying for the world's richest fighter jet deal in 15 years.

Industry sources said Lockheed Martin's F-16 or Boeing's Super Hornet have already emerged as frontrunners.

The military official's statements came a day after the US Senate endorsed a US-India nuclear deal, removing all hurdles for the resumption of civilian nuclear trade between the two countries after more than three decades.

Experts say the deal will also open doors for the military to buy technology which had been banned for export to India after the US slapped sanctions on the country following its 1998 nuclear weapons tests.

US defence contractors have been lobbying hard to secure deals with India.

Major's comments came less than a week after India and its main arms exporter Russia extended their military ties by 10 years with the sale of 347 tanks and talks on collaboration on a fifth-generation fighter jet.

Most of the big-ticket hardware from countries including Britain, France, Israel, Russia and the United States is destined for the technology-hungry air force.

"The Indian air force needs the capability to support India's resurgent growth and so we are phasing out old equipment with new hardware," Major said.

The air force will also buy six Hercules transport planes from Lockheed Martin for 968 million dollars and will begin final talks for six air-to-air refuelling planes with either Airbus or the Russians this month, Major said.

The first of two Israeli Phalcon Airborne Warning and Control System radar systems worth 1.1 billion dollars would reach India in January, other officials said.

Major, meanwhile, also said India had begun upgrading its military installations and airbases on the border with China to counter any possible threat from its giant Asian neighbour.

"A comprehensive infrastructure development programme has been undertaken in the northeast where roads and advanced landing grounds are being beefed up," he said.

"By 2009 we would have our Sukhoi-30 multi-role fighter jets deployed on the eastern sector," Major said as other officials said military engineers were working at high speed to fortify the Sino-Indian border.

The Indian military says China has also built strategic roads and air fields close to disputed frontier regions.

The two populous countries which have fought a brief but a bitter border war in 1962 still have territorial disputes that not been resolved despite 13 rounds of high-level talks.