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India picks French jet over Eurofighter in $10bn deal | |
(about 2 hours later) | |
French firm Dassault has emerged as the lowest bidder for a $10bn (£6.3bn) contract to supply India jet fighters. | French firm Dassault has emerged as the lowest bidder for a $10bn (£6.3bn) contract to supply India jet fighters. |
Dassault Aviation, as preferred bidder, will now enter final talks before signing a deal that will supply India's air force with 126 Rafale aircraft. | |
Correspondents say this is one of the world's biggest defence deals and is a major setback for rival bidder, the Eurofighter Typhoon. | Correspondents say this is one of the world's biggest defence deals and is a major setback for rival bidder, the Eurofighter Typhoon. |
Eurofighter lost out in December on an $8bn deal to supply jets to Japan. | Eurofighter lost out in December on an $8bn deal to supply jets to Japan. |
Shares in Dassault Aviation rocketed more than 20% as the latest news broke. | Shares in Dassault Aviation rocketed more than 20% as the latest news broke. |
'Purely cost' | 'Purely cost' |
The Typhoon is built by the German and Spanish branches of European aerospace giant EADS, Britain's BAE Systems and Italy's Finmeccanica. | |
Officials at the British High Commission in Delhi said they were disappointed with the decision and would now study the details. | Officials at the British High Commission in Delhi said they were disappointed with the decision and would now study the details. |
"It was expressly said this was about the cost of the contract, not a reflection on the health of bilateral relations between India and the countries," the commission said. | |
A spokesman for the Eurofighter Typhoon consortium told the BBC they were disappointed, but stressed that the decision was not final and negotiations were still going on. | |
"However, we respect the decision of the Indian MoD. With the Eurofighter Typhoon, we offered the Indian Air Force the most modern combat aircraft available," he said. | |
"Based on the Indian government feedback, we will now carefully analyse and evaluate this situation together with our European partner companies and their respective governments." | |
BBC defence and diplomatic correspondent Jonathan Marcus says the Indian air force is going through an unprecedented period of modernisation; a response in part to China's developing air power. | BBC defence and diplomatic correspondent Jonathan Marcus says the Indian air force is going through an unprecedented period of modernisation; a response in part to China's developing air power. |
Four other bidders had dropped out in the lengthy Indian selection process. | Four other bidders had dropped out in the lengthy Indian selection process. |
He says various reasons were in play in the Indian decision, including diversifying from Russian hardware and contractual problems with other bidders. | He says various reasons were in play in the Indian decision, including diversifying from Russian hardware and contractual problems with other bidders. |
French Minister of State for Foreign Trade Pierre Lellouche welcomed the deal, the first foreign order for the Rafale multi-role jet. | French Minister of State for Foreign Trade Pierre Lellouche welcomed the deal, the first foreign order for the Rafale multi-role jet. |
He said: "This is good news and France needs good news right now... It is good news for our aerospace industry and for our defence industry." | He said: "This is good news and France needs good news right now... It is good news for our aerospace industry and for our defence industry." |
Mr Lellouche also complained that "political pressure applied by our competitors does not make things very easy". | Mr Lellouche also complained that "political pressure applied by our competitors does not make things very easy". |
James Hardy, Asia Pacific specialist at IHS Jane's Defence Weekly, said this was a "big loss for Eurofighter". | James Hardy, Asia Pacific specialist at IHS Jane's Defence Weekly, said this was a "big loss for Eurofighter". |
"The Typhoon was widely tipped to be the favourite and had major political support from the big beasts of the Eurofighter nations. Both Germany and the UK invested a lot of time in pushing the Typhoon, so this will hurt." | "The Typhoon was widely tipped to be the favourite and had major political support from the big beasts of the Eurofighter nations. Both Germany and the UK invested a lot of time in pushing the Typhoon, so this will hurt." |
Indian Defence Minister AK Antony had earlier cautioned that this remained a "long process" and that no deal would be signed before the end of March. | Indian Defence Minister AK Antony had earlier cautioned that this remained a "long process" and that no deal would be signed before the end of March. |
One Indian defence ministry source confirmed to Reuters that the Rafale had been "much cheaper unit-wise", adding: "Moreover, the Indian air force, which is well-equipped with French fighters, is favouring the French." | One Indian defence ministry source confirmed to Reuters that the Rafale had been "much cheaper unit-wise", adding: "Moreover, the Indian air force, which is well-equipped with French fighters, is favouring the French." |
India is the biggest arms importer among emerging nations. | India is the biggest arms importer among emerging nations. |