Cameron urge to India reconsider its jet decision

David Cameron has vowed to “encourage” India to reconsider its decision to buy France’s Dassault jet fighter instead of Eurofighter’s Typhoon, in which BAE Systems, the UK defence contractor, has a large stake.

The Eurofighter’s loss to France raises questions about the UK’s relationship with India as well as the prime minister’s clout in New Delhi. The coalition government has put much focus on strengthening the UK’s ties with Asia’s third largest economy, illustrated by Mr Cameron’s high-profile trade visit to India last year.

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Mr Cameron said India’s decision to award Dassault’s Rafale jet preferred bidder status in the $20bn contract for 126 jets was disappointing, but added that Typhoon still had a chance to win the order – one of the biggest ever for defence industry – because the the final contract had not yet been.

“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 told MPs on Wednesday.

In Germany where Angela Merkel, chancellor, had also pushed hard for Typhoon, a spokesman said Berlin regretted Eurofighter’s offer had not been accepted “for the moment”. But he added that past bidding for such contracts showed that being granted exclusive talks did not always lead to a sale, and that other bidders could still have a chance.

The news that Typhoon, the clear frontrunner, had failed to win one of the key export deals for the industry comes at an awkward time for Mr Cameron’s government, which has been far more engaged in helping UK defence companies sell their equipment, weapons and support services abroad than that of Gordon Brown, his predecessor.

On Wednesday the Ministry of Defence published a white paper in which it pledged further to support defence industry exports, against a background of deep cuts to the national defence budget.

But Mr Cameron came under fire from his own MPs on Wednesday for not doing more to secure the deal for Eurofighter. David Davis, a member of Mr Cameron’s shadow cabinet while in opposition, asked why the UK gave so much aid to India but had not won this crucial contract. He asked the prime minister to “engage himself and the full force of the government to change this decision”.

Like London and Berlin, the four companies in the Eurofighter consortium, including the Franco-German EADS , Britain’s BAE Systems and Italy’s Finmeccanica, also have promised to fight on.

BAE said in a statement: “We will continue to support the Indian customer and its evaluation process and work with our European partner companies and their respective governments to seek to understand the basis of the announcement.”

Endre Lunde of IHS Jane’s, the consultant, said French political backing had been essential in strengthening the French bid, and that the Rafale win was therefore “a major victory for President Nicolas Sarkozy . . . and a major loss for the UK”.