Mukherjee said the deal of 250-million dollars was signed between the state-run Hindustan Aeronautics Limited (HAL) and Russia's Rosoboronexport under which the former would make 120 RD33 series three engines at Koraput plant for upgrading the MiG 29 fighter planes.

Expert say the deal would help HAL master the assembly of next generation jet engines, including RD-33MK engines for deck based MiG-29K naval fighters being acquired under the Gorshkov Aircraft Carrier deal.

It will also help develop thrust-vectoring engines for the MiG-35 fighters, which Russia is fielding for nine-billion-dollar Indian tender for 126 advanced combat jets.

After the cabinet meeting here today, Mukherjee also said that New Delhi would ink an agreement with Islamabad on reducing risk from accidents relating to nuclear weapons, during the visit of Pakistani Foreign Minister Khurshid Kasuri next month.

"Certain agreements with Pakistan were almost finalised. One of them is the agreement on reducing the risk from accidents relating to nuclear weapons. This agreement was discussed with Pakistan and the discussion was on for quite sometime. Now it has been finaslied. It will be signed during the visit of Pakistan's Foreign Minister to India in connection with the joint commission. The Cabinet approved it," he said.

The agreement was finalised during Mukherjee's recent visit to Islamabad, which was his as the foreign minister.

A fourth round of the composite dialogue between India and Pakistan will begin in March, and there will also be a visit by Pakistani Prime Minister Shaukat Aziz to New Delhi in April for the SAARC Summit.