New Delhi's Defence Acquisition Council approved proposals for the purchases, the defence ministry said in a statement, but it added the price and other terms still had to be negotiated with the French government.
The discussions over the long-awaited deals would take into account "all relevant aspects, including comparative procurement price of similar aircraft by other countries", the statement said.
The naval version of Dassault's Rafale jets are intended for India's first indigenous aircraft carrier, the INS Vikrant, which was commissioned last year.
India was already purchasing six Scorpene submarines and the statement said the three additional vessels would be built "with higher indigenous content" by Mazagon Dock Shipbuilders near Mumbai, creating "significant employment opportunities in the domestic sector".
Despite differences over the war in Ukraine and tensions over human rights in India, Western democracies are courting Modi and the world's most populous country as a counterweight to China in Asia.
"India is one of the pillars of our Indo-Pacific strategy," an aide to French President Emmanuel Macron told reporters this week on condition of anonymity.
At the same time, New Delhi has been expanding its armed forces to upgrade its mostly Soviet-era weaponry and respond to what many in India see as a growing threat from regional rival China.
New Delhi is one of the biggest buyers of French arms, with Modi announcing a landmark deal for 36 Rafale fighter jets during a trip to Paris in 2015 that was worth around 4.0 billion euros ($4.24 billion) at the time.
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