India's Defence Ministry has invited the two rivals for a $12 billion jet fighter contract -- France's Dassault and the European Eurofighter consortium -- to unveil their bids next week.

The Dassault group is hoping to secure the contract for 126 jets, one of the largest military contracts of recent years, with its Rafale fighter which has yet to find any foreign buyers.

A source for the French firm, who declined to be identified, said it was unclear how quickly the winning bid to supply the 126 jet fighters would be announced.

The source said it would reveal its bid on November 4.

"It could be settled in one day or it could take months if the (price) gap is narrow," the source said.

The Rafale and the Eurofighter Typhoon were shortlisted for the contract in April, beating fierce competition from US giants Boeing and Lockheed Martin.

Other bidders included Sweden's Saab AB and the Russian makers of the MiG 35.

The Eurofighter is made by the four-nation European Aeronautic Defence & Space consortium, representing Germany and Spain, Britain's BAE Systems and Italy's Finmeccanica.

The contract includes the outright purchase of 18 combat aircraft by 2012 with another 108 to be built in India.

India, the biggest importer of military hardware among emerging nations, issued the initial tender in 2007 and trials of the aircraft competing for the deal began a year later.

The procurement of the fighter jets is a key part of New Delhi's military modernisation programme, aimed at securing its borders against its traditional and emerging rivals Pakistan and China.

International consultancy firm KPMG estimates New Delhi will hand out military contracts worth $112 billion by 2016.