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A Dassault Rafale fighter jet takes part in a flying display during the 49th Paris Air Show at the Le Bourget airport near Paris June 23, 2011. REUTERS/Gonzalo Fuentes/Files

A Dassault Rafale fighter jet takes part in a flying display during the 49th Paris Air Show at the Le Bourget airport near Paris June 23, 2011.

Credit: Reuters/Gonzalo Fuentes/Files

PARIS | Tue Jan 31, 2012 6:31pm IST

PARIS (Reuters) - A French source close to the matter said on Tuesday that India had not yet signed a contract to buy Dassault Aviation (AVMD.PA) Rafale fighter jets, though a step forward had been taken.

Dassault has placed the lowest bid to supply India with 126 fighters in a multi-billion dollar deal, two Indian government sources said earlier on Tuesday, adding that further commercial negotiations would first have to take place.

"No contract has been signed," the French source said.

A source close to the French finance ministry dampened reports that Dassault had already won the contest, which is pitting the Rafale against the Eurofighter Typhoon.

(Reporting by Elizabeth Pineau and Matthias Blamont; Editing by James Regan)

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