Dassault of France has emerged as the lowest bidder for a $US10 billion contract to supply jet fighters to India.
Dassault Aviation will now enter final negotiations before signing the deal that will supply India's air force with 126 Rafale aircraft.
Shares in Dassault Aviation rose more than 20% on Tuesday.
Correspondents say this is a major setback for rival Eurofighter Typhoon.
Eurofighter lost out in December on an $US8 billion deal to supply jets to Japan.
The BBC reports four other bidders earlier dropped out in the lengthy selection process.
India is the biggest arms importer among emerging nations.
