President Francois Hollande vowed not to let threats deter France from its fight against terrorism on Monday, the second day of an official visit to India focused on security and trade.

Hollande was responding to a new video released by the Islamic State group that threatens countries of the US-led coalition that have been fighting IS and purports to show nine jihadists involved in November's deadly Paris attacks.

"Nothing will deter us, no threat will make France waver in the fight against terrorism," the French president told reporters in New Delhi.

"These images only serve to discredit the perpetrators of this crime."

Hollande, who will be chief guest at Tuesday's Republic Day parade in New Delhi, will on Monday hold talks with Indian Prime Minister Narendra Modi expected to focus on security after the Paris attacks.

Modi has said he invited Hollande to India as a show of solidarity after the assault on the French capital, which killed 130 people and evoked memories of the even deadlier 2008 Islamist attacks on Mumbai.

The French leader is also looking to shore up a troubled multi-billion dollar fighter jet deal during his three-day visit to India.

The two countries are still struggling to nail down a deal for India to buy 36 Rafale fighters jets made by the French company Dassault, which is in itself a watered-down version of a plan first unveiled in 2012.

Hollande's visit had raised fresh expectations that the Rafale deal would be finalised after years of tortuous negotiations.

But a senior French official, speaking on condition of anonymity, told reporters on Sunday that the two sides were still haggling over the price, which experts say could reach around five billion euros ($5.6 billion).

Hollande has said he is "optimistic" that an inter-governmental accord that would pave the way for a final contract would be agreed on Monday, but also warned that pinning down the fine details of such a deal "obviously takes time".

One sticking point is Delhi's insistence that arms makers invest a percentage of the value of any major deal in India.

Hollande's visit has however given impetus to other deals, including one for the French-based Airbus consortium to build military helicopters with India's Mahindra group.

- Solar energy push -

Hollande, who began his visit in the northern city of Chandigarh, said the extremist threat weighed as heavily on France as on India, recently hit by a deadly attack on a military base near the border with Pakistan.

The 17-minute video put out by the IS group describes the attackers as "lions" who "brought France to its knees" and urges Muslims in France to rise up against the country's leaders.

It features the heads of Hollande, French Prime Minister Manuel Valls, British Prime Minister David Cameron and US President Barack Obama, with targets superimposed on them.

Modi and Hollande will hold formal talks at the Indian premier's office, before laying a foundation stone at the new headquarters of the International Solar Alliance, a 121-nation group launched by Modi at the Paris COP21 conference in November to expand affordable solar power.

Hollande has expressed hope that some of the French businesses travelling with him will be at the forefront of the solar energy push.

The leaders are expected to announce a pact between France's CNES and India's ISRO space agencies, for a joint satellite dedicated to climate change research.

India, the world's third biggest emitter of greenhouse gases, pledged in the lead up to the Paris conference to cut carbon intensity -- the amount of pollution per dollar of GDP -- by up to 35 percent by 2030.

But it still plans to double its coal production by 2020 to provide electricity to the 300 million Indians who still do not have it.

On Tuesday, Hollande and Modi are expected to sit side by side to watch the annual Republic Day parade, a pomp-filled spectacle of military might which includes columns of soldiers and Soviet-era tanks.

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