However, the first squadron will be made of up of just four Tejas aircraft, in stark contrast to at least 16 aircraft that usually makes up for one squadron globally.
State-run Hindustan Aeronautics Limited, manufacturer of Tejas, will hand over the fourth aircraft to the Air Force on July 1.
The four aircraft will be used for training and familarisation.
Rather than waiting for LAC Mk II, IAF had decided to go in with an upgraded version of the existing Tejas with over 40 modifications.
The force wants Active Electrically Scanned Array (AESA) Radar, Unified Electronic Warfare (EW) Suite, mid-air refuelling capacity and beyond the vision range missiles.
As per the production plan, six aircraft will be made this year (2015-16) and HAL will subsequently scale it up to eight and 16 aircraft per year.