The USAF is separately training some 100 IAF personnel, including pilots and technical crew.
The agreement to buy the C 17 was formalized after the aircraft's trials in hot and cold and low and high altitude trials in India, including landings and takeoffs at the short 4,620-footGaggal airfield in Himachal Pradesh.
The aircraft was then commanded by Col Kelly Latimer, a former NASA pilot now with Boeing as a test pilot.
"The C-17's ability to operate in extremely hot and cold climates; transport large payloads across vast ranges; and land on short, austere runways makes it ideal for India's airlift needs," said Nan Bouchard, Boeing vice president and C-17 programme manager.