(Reuters) - India will not sign a multi-billion dollar contract to buy European fighter jets before the fiscal year ends in March, the defense minister said on Tuesday, about a deal to revamp ageing weapons in line with the country's rising global influence.
"Not this financial year," Defence Minister A.K. Antony told Reuters in reply to a question about when the deal that has been in the works since 2007 would be signed.
However, India will "soon" announce the lowest bidder for the tender for 126 jets worth up to $15 billion, two government sources with knowledge of the deal told Reuters.
One of the sources said France's Rafale jet was the likely winner, adding that the defense ministry was now considering buying another 80 or so jets and could invite bidders excluded from the current process to take part.
Already Asia's third-largest economy and growing fast, India has emerged as the world's leading importer of weapons as it jostles with China for influence and reach on the world stage.
Dassault's (AVMD.PA) Rafale is competing with the Typhoon fighter made by four-nation consortium Eurofighter in what is currently one of the largest global weapons tenders.
"It is a long process. The file has not come to my table," Antony said, adding that the finance ministry and a cabinet panel headed by the prime minister have to look at the agreement after he signs off.
The Eurofighter Typhoon is built by the German and Spanish branches of EADS (EAD.PA), Britain's BAE Systems (BAES.L) and Italy's Finmeccanica (SIFI.MI). Dassault is French.
American, Russian and Swedish bids were rejected in April.
The U.S. company Lockheed Martin (LMT.N) has kept alive hopes of selling its F-35 Joint Strike Fighter to India.
One defense ministry source with knowledge of the negotiations said the life-time cost of the tender including training and maintenance may reach $15 billion.
Previous estimates put the cost around $11 billion.
The defense ministry source said each Rafale was $4 million to $5 million cheaper than its rival and the plane was preferred by the Air Force.
"Unit-wise, the French plane is much cheaper than the Eurofighter. Moreover, the Indian Airforce, which is well-equipped with French fighters, is favoring the French fighter," said the source, who asked not be named.
