Downing Street is to try and persuade the Indian government to rethink its plans to buy Rafale fighter planes from France, rather than UK-backed Eurofighter Typhoons.
No 10 said it would be contacting Delhi to understand the reasons behind the decision to go with the French option.
There was some suggestion that the British might ask the European commission to examine whether EU state aid rules had been breached, but officials said it was premature to speak in those terms.
At prime minister's questions in the Commons, David Cameron sought to reassure Conservative MPs that the decision to give the French preferred bidder status would not mean job losses.
Asked about the issue at PMQs, Cameron said the Typhoon was a "superb aircraft, far better than Rafale".
"Of course, I will do everything I can as I have already to encourage the Indians to look at Typhoon, because I think it is such a good aircraft," he said.
"The decision is obviously disappointing, but it is about who the Indians have assessed as making the lowest bid and therefore asked to enter into further negotiations. They have not yet awarded the contract."
He added: "We do not expect any job losses stemming from this decision and it does not rule out Typhoon for India."
The announcement is a personal blow to Cameron, who led one of the largest ever business delegations to India to persaude the government of the value of British industry.
Further questions were raised by Tory MPs about the wisdom of the UK aid programme to India.
Cameron looks to persuade India to rethink Eurofighter Typhoon deal | Business | The Guardian
No 10 said it would be contacting Delhi to understand the reasons behind the decision to go with the French option.
There was some suggestion that the British might ask the European commission to examine whether EU state aid rules had been breached, but officials said it was premature to speak in those terms.
At prime minister's questions in the Commons, David Cameron sought to reassure Conservative MPs that the decision to give the French preferred bidder status would not mean job losses.
Asked about the issue at PMQs, Cameron said the Typhoon was a "superb aircraft, far better than Rafale".
"Of course, I will do everything I can as I have already to encourage the Indians to look at Typhoon, because I think it is such a good aircraft," he said.
"The decision is obviously disappointing, but it is about who the Indians have assessed as making the lowest bid and therefore asked to enter into further negotiations. They have not yet awarded the contract."
He added: "We do not expect any job losses stemming from this decision and it does not rule out Typhoon for India."
The announcement is a personal blow to Cameron, who led one of the largest ever business delegations to India to persaude the government of the value of British industry.
Further questions were raised by Tory MPs about the wisdom of the UK aid programme to India.
Cameron looks to persuade India to rethink Eurofighter Typhoon deal | Business | The Guardian
