Contract negotiations for the acquisition of six A330 multi-role aircraft will soon begin.
The A330 MRTT is based on Airbus' A300-200 commercial aircraft. It has a top speed of 547 miles per hour and a range of 9,200 miles.
Its basic fuel capacity is 245,000 pounds, which enables the aircraft to conduct aerial refueling without additional fuel tanks.
Australia, Saudi Arabia, the United Arab Emirates and Britain have ordered a total of 28 of the aircraft.
"We are grateful for the confidence shown in our company by the government of India and the Indian air force and we appreciate the detailed and fair appraisal of the competing products which they have conducted," said Airbus Military Chief Executive Officer Domingo Urena Raso. "This has been a long and tough competition and we are honored to have been selected.
"We are fully committed to the next stage of the negotiations, and ultimately to providing the IAF with what is unquestionably the most advanced tanker/transport aircraft flying and certified today."