In defence, this week’s big news – and even bigger surprise – was India’s decision choose France’s jet fighter over the pan-European Typhoon in a contract that could eventually be worth $20bn.

The win was a lifeline for Dassault’s Rafale jet, which has not managed to secure a single export order.

For Eurofighter’s Typhoon, India’s decision to grant the underdog preferred bidder status was a significant setback, leaving Eurofighter peddling for smaller export contracts in the Middle East, Malaysia and South Korea.

Politically, the loss was especially embarrassing for David Cameron, UK prime minister, and Angela Merkel, the German chancellor, who had lobbied heavily for the jet.

Mr Cameron came under fire from his own party for not doing more for British defence companies, even though his efforts since coming to power in May 2010 have been lauded by the industry as a marked improvement over the previous government.

Mr Cameron vowed to lobby on for what some view as the superior jet, with more agility, newer technology and eventually having better flexibility to be used as an air-to-air fighter and air-to-ground weapon.

For Germany, Italy, Spain and the UK and the host of companies involved, including pan-European EADS, which led the Indian pitch, BAE Systems, Rolls-Royce of the UK, and Italy’s Finmeccanica, the news has led to a fair bit of soul-searching, but more importantly, to a redoubling of their efforts to knock Rafale off its new-found perch.

That is because the India decision, which was based on Rafale’s lower sticker price, could still be overturned, given the country’s history of changing its mind often before the final contract is signed, the losing side and industry analysts stressed.

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