The United States has forced an Israeli defence firm to back out of a multi-billion dollar tender to sell new multi-role fighter planes to the Indian Air Force, an Israeli newspaper has claimed.

Under pressure from the Pentagon, the Israeli Defence Ministry has ordered Israel Aerospace Industries (IAI) to back out of the deal as America has expressed concern that its technology, used by Israel, would be integrated into the Gripen jets to be offered to India, The Jerusalem Post reported.

“The stated concern was that Western technology in Israeli hands would make its way to the Indians,” an unnamed Israeli official was quoted as saying.

The US objection, however, seems strange as both Boeing and Lockheed Martin, the two largest US defence contractors, are also competing for the 120 multi-role fighter aircraft deal, estimated at USD 12 billion.

Israeli officials said it was more likely that the Americans were concerned that if IAI competed for the deal with the Swedish aerospace company, Saab, the two US companies would be forced to lower their prices.

IAI was supposed to provide the electronic systems—communications, radar and electronic-warfare—for Gripen. The multi-role fighter plane is in service in Sweden, the Czech Republic, Hungary and South Africa.

This is not the first time that an Israeli company has been forced out of a deal because of American pressure. Last summer, the Israel Military Industries was ordered to back out of a bid for a half-a-billion dollar deal to develop a new tank for the Turkish Armed Forces.