"Today defence and security company Saab AB has received information from the Indian ministry of defence that Gripen has not been shortlisted for the Indian Medium Multi-Role Combat Aircraft (MMRCA) programme," the company said in a statement.
India is planning to replace its fleet of 26 ageing MiG 21 Soviet-era jets to the tune of some €11 billion ($16 billion).
Other than Saab, it is also considering France's Dassault, Russia's MiG, America's Boeing and Lockheed Martin, Europe's EADS, Britain's BAE Systems and Italy's Finmeccanica as possible suppliers.
"We have received this decision and will closely monitor the future process and provide additional information if requested by the Indian ministry of defence," SAAB chief executive officer Håkan Buskhe said.
He insisted the Gripen was a world class fighter, and that India was being offered a "very competitive price".
The Gripen is already in service in the air forces of Sweden, the Czech Republic, Hungary, South Africa and Thailand, the company said.