( Financial Times ) -- France 's Dassault has been awarded frontrunner status in the hotly contested $ 20bn race to supply 126 fighter jets to India , providing a much-needed boost for French economic and industrial prestige . The Indian government said the French Rafale fighter jet had beaten the four-nation Eurofighter Typhoon to become preferred bidder to equip India with the multi-role fighter jets in one of the world 's largest military contracts . Dassault now enters exclusive talks with the Indian government . The contract , estimated to be worth $ 15bn- $ 20bn , will help shape India 's air power for the next three decades and serve as the bedrock of a strategic partnership . It also has the potential to reinvigorate the French defence industry when military budgets are being slashed across Europe . The decision is a blow for Eurofighter , whose Typhoon aircraft was seen as the clear frontrunner . But it is a huge boost for Nicolas Sarkozy , France 's president , and Dassault , which has yet to secure an export order for the Rafale . Shares in Dassault rose 18 per cent in Paris . Mr Sarkozy faces an election in May and the declining strength of French industry is expected to be a crucial campaign battleground , with the incumbent trailing his socialist rival in opinion polls . He seized on the announcement as `` a signal of confidence in the French economy '' . The deal `` proves that if we have a good product France can win in extraordinarily competitive markets '' . David Reeths , a consultant at IHS Jane 's , said : `` It 's of particular importance to Dassault as [ this competition ] is really their last , best chance to continue high-end fast jet production . '' India 's decision came after evaluating the life-cycle cost of the aircraft , the acquisition cost and so-called military offset considerations . The offsets include the level of technology that European companies will disclose to India and the share of investment they will bring to India 's defence industries . The four companies in the Eurofighter consortium , led by the Franco-German EADS and including Britain 's BAE Systems and Italy 's Finmeccanica , have vowed to fight on given India 's recent history of stripping companies of their preferred bidder status after long , drawn-out negotiations . `` We are disappointed , but it 's not all over until the contract is signed . We do n't yet know the final decision , '' one UK diplomat said . India 's defence ministry said a final contract would be awarded in the financial year beginning April 2012 . It said the Rafale was the cheaper of the rival bids . `` Rafale is the most competent contender , '' said a person close to the negotiations at India 's defence ministry . After trials last year , India selected the Rafale and the multinational Eurofighter Typhoon to compete in the final stages of the competition . It had discarded bids from Boeing 's F/A-18 Super Hornet , Lockheed 's F-16 Super Viper , Sweden 's Saab Gripen and Russia 's MiG-35 . The decision will be a setback to Eurofighter , which had strongly lobbied India to buy its aircraft and considered its bid stronger in terms of performance , security of supply and strategic alignment . It is also a blow for David Cameron , the UK prime minister , and Angela Merkel , the German chancellor , who both lobbied on behalf of Eurofighter . Additional reporting by Girija Shivakumar in New Delhi and Hugh Carnegy in Paris . © The Financial Times Limited 2012 .
France 's Dassault has been awarded frontrunner status to supply 126 fighter jets to India . Hotly contested $ 20 billion race seen as a boost to French industrial prestige .