A contingent of French infantry in India for joint military exercises led the march down the capital's central Rajpath avenue, the first time foreign forces have ever taken part in the parade.
Indian Prime Minister Narendra Modi invited Hollande as chief guest in a show of solidarity with France after militant attacks in Paris last November killed 130 -- recalling a 2008 assault on Mumbai that killed 166.
The mood on Tuesday was more celebratory, with Modi -- sporting a gold turban that rivalled the spectacular military headgear on display -- and Hollande chatting as they sat side by side in a bulletproof glass enclosure.
An estimated 10,000 spectators braved thick smog and air quality levels classified as hazardous on the US embassy website to watch the display.
Delhi is the world's most polluted capital and levels of PM2.5 -- the tiny particles that can enter the bloodstream -- frequently reach 10 times the World Health Organization's safe limit.
But the skies remained dry, unlike last year when chief guest US President Barack Obama was forced to shelter under an umbrella throughout.