"A draft of the MoU (Memorandum of Understanding) is ready and will be signed soon," Parrikar said, adding he has spoken in detail about the project to Railway Minister Suresh Prabhu.
The Defence Minister said that the "gravity" of the border issue between China and India has come down as far as Arunachal Pradesh is concerned.
Parrikar welcomed PM Modi's "extremely positive decision" to purchase 36 Rafale fighter jets during his trip to France, saying a deal of such magnitude had not been signed for the last 17 years.
"I welcome Modi's decision. It was necessary and was the most urgent requirement," Parrikar said, as Modi and French President Francois Hollande signed a deal at their summit in Paris for purchasing the 36 Rafale jets.
He also said that the 'Make in India' campaign was a long-term solution and the need to purchase the 36 fighter jets was immediate.