NEW DELHI (Reuters) ? The Indian government will open bids on Friday for a $11 billion contract to buy fighter jets for India's air force, a defence ministry source said, moving closer to awarding one of the world's biggest arms contracts to one of two European groups.
Two European contenders are left in the race to sell India 126 fighter jets and help revamp the country's creaking defence equipment in line with its rising global clout. American, Russian and Swedish bids were rejected in April.
"A meeting is scheduled tomorrow for the bids," the source told Reuters by phone, adding that it may take two-three weeks to pick a winner.
Still in the fray are Eurofighter, which makes the Typhoon fighter jet and is a four-nation consortium of EADS, representing Germany and Spain, Britain's BAE Systems and Italy's Finmeccanica.
Their competitor is France's Dassault, which makes the Rafale plane.
The air force would prefer to award the deal only to one company, rather than splitting the order between the remaining two firms, a second source said.
"With a potential contract price of $9 billion to $14 billion, this is the single biggest competition in the global defence aviation industry at the moment and offers both bidders a much-needed opportunity in a major market," James Hardy, Asia Pacific Editor at IHS Jane's Defence Weekly, wrote in an email statement.
Both remaining jets are riding successful performances as part of the NATO air campaign in Libya. Failure here would be a major blow after both made substantial investment in promoting their platforms in India.
For the Rafale, it would leave it without an export order and pegging its hopes on competition in the United Arab Emirates and Brazil, while the Typhoon would have to rely on securing contracts in Japan and other Asian markets, he said.
India is the world's largest arms importer, accounting for 9 percent of the global arms trade between 2006 and 2010, according to data from Swedish think-tank Stockholm International Peace Research Institute.
It plans to spend $50 billion over the next five years to upgrade its military, which largely consists of Soviet-era gear, to counter the rising might of China and threats from Pakistan.
The U.S. expressed interest on Wednesday to sell its most sophisticated fighter to India, six months after New Delhi rejected two older U.S. warplanes for the fighter jet deal.
The elimination of the U.S. competitors -- a potential bump in forging closer ties -- came despite lobbying from President Barack Obama and coincided with the unexpected resignation of the U.S. ambassador to India.
(Editing by Matthias Williams ans Sugita Katyal)
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