The government will not sign a multi-billion dollar deal to buy fighter jets before this fiscal year ending in March, defence minister AK Antony told reporters on Tuesday.
However, New Delhi will "soon" announce the lowest bidder for the contract worth about $11 billion, two defence ministry sources told Reuters separately.
Two European contenders are left in the race to sell India more than a 100 fighter jets and help revamp the country's creaking defence equipment in line with its rising global clout.
Still in the fray are Eurofighter, which makes the Typhoon fighter jet, and a four-nation consortium of EADS, representing Germany and Spain, Britain's BAE Systems and Italy's Finmeccanica.
Their competitor is France's Dassault, which makes the Rafale plane.