The Air Chief's comments come against the backdrop of a slugfest between ruling BJP and the Congress, which has alleged the government caused "insurmountable loss" of taxpayers' money in signing the deal for 36 Rafale aircraft from France for Rs. 58,000 crores.
The Congress says the BJP government has agreed to pay for each Rafale aircraft, three times the price that was negotiated in 2012 by the previous UPA government it led.
The top Air Force officer said this wasn't true.
"We have negotiated a better deal in the Rafale contract than what was in the MMRCA contract (Medium Multi-Role Combat Aircraft finalized during UPA tenure)... It is a cheaper deal," he told reporters at the Adampur Air Force station near Jalandhar in Punjab.
"It is not overpricing," he said, also rebutting the charge that technology was not being transferred to India under the deal.
French company Dassault's Rafale had emerged as the lowest bidder in an international tender in 2012 but the final deal for 126 aircraft was never closed by the UPA government. By the time the BJP-led government came to power in 2014, the deal was deadlocked with Dassault refusing to certify key components of the jet which were to be built by Hindustan Aeronautics Limited, unless a series of conditions were met.
The final deal in 2016 was higher than what was on offer four years earlier but the new price includes state of the art weaponry, spares support for seven years and India-specific customisation of the jet that the French Air Force and Navy operate.
France had earlier categorically rejected the allegations. So did Anil Ambani-led Reliance Defence Limited that demanded the Congress retract allegations that it was unfairly picked to be the French firm's Indian partner.
But Congress Vice President Rahul Gandhi kept the jibes coming at the government. Earlier in the day, Mr Gandhi had, in a series of sarcastic tweets had reiterated the attack. He also took a swipe at PM Modi, which he has in the past accused of running a "suit-boot ki sarkar" or government for the rich. "Modi ji - nice touch removing the suit. What about the loot?" Mr Gandhi tweeted.
Union Minister Ravi Shankar Prasad also responded to the barbs from the Congress. "They are finding it difficult to accept that there has been no case of corruption in the three-year rule of the Narendra Modi government," Mr Prasad said.
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