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Two homegrown aircraft were handed over to the Air Force as part of a new squadron called the "Flying Daggers".
The combat aircraft are part of India's multi-billion dollar upgrade of its Soviet-era military hardware, in part to counter rivals Pakistan and China.
The Air Force has said it plans to add 14 Tejas aircraft in the next two years as it seeks to replace the old Russian MiG-21s, nicknamed "Flying Coffins" because of their poor safety record.
The Tejas can carry air-to-air and air-to-surface weapons. The new squadron will get a total of 18 aircraft including four trainers by 2018.
Coconuts were cracked open and multi-faith ceremonies were held to mark the induction of the planes. A spectacular water-cannon salute was also part of the rituals. The name "Tejas", which means radiance in Sanskrit, was given by former prime minister Atal Bihari Vajpayee.
Describing it as a matter of "unparalleled pride and happiness", Prime Minister Narendra Modi tweeted: "This illustrates our skills and strengths to enhance indigenous defence manufacturing."
The Tejas jets, developed by Hindustan Aeronautics Limited (HAL), are said to be the smallest and lightest supersonic fighter aircraft of their class.
The single-seat fighter is considered superior to counterparts like the JF-17 aircraft jointly built by China and Pakistan. Tejas has had no accident in 3,000 hours of flying and its use of composites helps lower its radar signature, making it harder to detect early.
India is separately in negotiations for the purchase of 36 top end Rafale fighter planes from France's Dassault Aviation.
India's fighter aircraft fleet, made up of a mix of Russian, British and French planes, is down to 33 squadrons as against the air force's requirement of 45 to face Pakistan and China.
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