BAE Systems has been beaten in the race to secure an Indian government fighter jet contract by French manufacturer Dassault.
The Dassault Rafale is understood to have been identified as preferred model for the contract, worth up to $11bn (£7bn), ahead of the Eurofighter Typhoon – in a major blow to UK manufacturing.
The Typhoon is made by BAE Systems, EADS and Italy’s Finmeccanica and was considered favourite to bag the contract for 126 jets. The aircraft is assembled at BAE’s aerospace facilities in Lancashire.
Prime Minister David Cameron had held talks with the Indian government about the deal – one of the biggest overseas defence orders ever – and it would have supported thousands of UK jobs.
However, Dassault is understood to have undercut the Typhoon partners on price.
French President Nicola Sarkozy said: “France welcomes the Indian government’s decision to chose a French plane and to enter into exclusive negotiations with Dassault.”
BAE’s disappointment was softened by news that an $850m US ammunition contract has just been confirmed after an initial complaint.
