The council, which met under the chairmanship of defence minister Manohar Parrikar, also cleared a Rs 6,966 crore deal for the purchase of 48 Mi17-V5 helicopters from Russia.
Approval was also given for the purchase of seven additional squadrons of Akash missiles for the Air Force worth Rs 4,790 crore and eight Chetak helicopters for the Navy.
The Army got clearance for 120 mine trawls, which will be bought from Russia and are used to blast mines ahead of tanks.
A proposal for DRDO-designed 10 metre Short Span Bridges, which will be vehicle mounted, was also cleared at a cost of Rs 490 crore.
The DAC however did not take a decision on the Navy’s proposal to acquire over 100 utility helicopters. Neither did it take a decision on going ahead with P75I submarine tenders worth over Rs 60,000 crore.
On purchasing Rafale combat jets, a ministry official said after the negotiation committee briefed the DAC about the progress so far, it gave its approval to go ahead.
India announced it will buy 36 Rafale jets from France during PM Narendra Modi’s visit in April.
HT had reported on August 26 India and France are likely to reach a breakthrough soon in negotiations on the Rafale deal, paving the way for the Indian Air Force (IAF) to induct 36 French-made warplanes.
The deal could be worth Euro 8 billion. A possible climbdown by the French side over a key sticking point in talks — an offset clause that requires France to invest 50% of the value of the contract in India — could help both sides clinch the deal, sources familiar with the talks had said.
The sources said France had signalled a softening of its stand on the tricky issue following intervention at the highest levels of both governments.
Meanwhile, French defence minister Jean-Yves Le Drian who was expected to arrive on Tuesday, has deferred his trip.