UPDATE 1-France's Dassault out of India fighter deal

NEW DELHI, April 16 Thu Apr 16, 2009 9:23am EDT

NEW DELHI, April 16 (Reuters) - France's Dassault Aviation is out of the running for a $10 billion contract to supply India with 126 multi-role fighter jets, an Indian defence ministry spokesman said on Thursday.

Boeing (BA.N), Lockheed Martin Corp (LMT.N), Russia's MiG-35, Sweden's Saab (SAABb.ST) KAS-39 Gripen and the Eurofighter Typhoon, a consortium of British, German, Italian and Spanish companies, were the other parties that submitted bids last year for the contract, one of the biggest in the world.

"Rafale did not meet the usual requirement," the spokesman told Reuters.

"The other five companies are still in the race," he said.

In Paris, a Dassault Aviation (DAST.PA) spokesman had no immediate comment on the announcement.

Dassault's other leading partners in the Rafale project include Thales (TCFP.PA), which makes the radar, and engine maker Safran (SAF.PA).

India has said it will soon begin trials of the fighter jets, as it plans to replace its ageing Soviet-era fleet. Defence officials have said the trial process could begin by end-May and could take nearly a year to test the capability of the fighters.

"It will be a long process, as we will check various things, including the capabilities of the fighters in combat scenarios," the spokesman said.

India plans to spend more than $30 billion over the next five years to modernise its largely Soviet-era weapons systems and is also launching its first military spy satellite next year. (Additional reporting by Tim Hepher in Paris; Editing by John Mair)

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