This file photo combination shows a Eurofighter Typhoon aircraft (top) and a Dassault military jet Rafale (bottom).
India has rejected U.S. firms for an $11 billion fighter jet contract, shortlisting European firms instead, in a move that could sour its relationship with the United States while broadening its strategic ties with other regions.
The rejection comes despite lobbying from President Barack Obama during a high-profile visit to India five months ago, and coincides with the unexpected resignation of the U.S. ambassador to India, who cited "personal, professional, and family considerations" in a statement on Thursday.
Lockheed Martin's F-16 and Boeing's F/A-18 Super Hornet did not meet the Indian Air Force's technical requirements, a defence ministry source told Reuters.
"The Americans will be very unhappy and people who have been backing the contract will say India has not sufficiently taken into account the political relationship with the U.S.," said Kanwal Sibal, a former Indian foreign secretary. "That is a political setback for relations."
Relations between the two democracies have been on the rise after the end of the Cold war, when India was seen as closer to the Soviet Union.
In his three-day trip -- the longest stay in any foreign country by Obama -- the U.S. leader also announced $10 billion in business deals.
But suspicions remain. India has strived to broad-base its diplomatic relationships, working along with China, Russia and other emerging powers to avoid being perceived as part of the U.S. camp.
India has also been unwilling to commit to greater defence ties, including joint military exercises and patrols.
India also ruled out Sweden's Saab JAS-39 and Russia's MiG-35, departing from a long-running tradition of relying mainly on Russian aircraft for its Air Force.