In a diplomatic coup for India that sets the stage for Prime Minister Narendra Modi’s visit to the U.S. capital in June, the Obama administration on Monday announced that the U.S. would not be financing the sale of F-16 fighter jets to Pakistan. The administration’s turnaround, by now aligning itself with the bipartisan sentiments expressed in the U.S. Congress against giving aid to finance the deal, also signifies a change in its attitude towards Pakistan.

“…while Congress has approved the sale, key members have made clear that they object to using Foreign Military Financing (FMF) to support it. Given congressional objections, we have told the Pakistanis that they should put forward national funds for that purpose,” U.S. State Department spokesperson John Kirby said.

The original plan was to sell eight F-16s to Pakistan and finance most of the $699 million deal through FMF. Senate Foreign Relations Committee Chairman, Republican Bob Corker and Democratic Ranking Member Ben Cardin, in early March, announced that they would not approve FMF for Pakistan until it demonstrated “behavioral changes” in its support of terrorism and its dealings with India.

India has been strongly protesting the U.S. decision to give these fighter planes to Pakistan, and the matter figured in Foreign Secretary S. Jaishankar’s meetings with U.S. officials last week in Washington. India has said these fighters could be used to threaten India, a concern that many U.S. lawmakers also have raised during a hearing on April 27. Mr. Modi will be addressing a joint session of Congress on June 8.

The State Department announcement came on the fifth anniversary of the U.S. raid in Pakistan that killed al- Qaeda chief Osama bin Laden. On a special CNN programme on the Laden raid, President Barack Obama said he took Pakistan at its word on its ignorance about the terror leader’s presence in its territory, but Hillary Clinton, who was then the Secretary of State, said she did not believe Pakistan. “I believe Pakistan knew,” she said. “We could not prove it,” she said, adding that it was too much of a coincidence that the Pakistani military did not notice the distinct building that housed Osama.

While the U.S. is increasingly “frustrated with Pakistan” — as a diplomatic source put it — it cannot easily jettison it. Mr. Obama said in the interview that the U.S. had “excellent counter terrorism cooperation with Pakistan,” and on April 27, Special Envoy for Af-Pak Richard Olson argued that F-16s improved Pakistan’s counter terror capabilities.

Even the announcement of the U.S. decision to walk back on the F 16 deal came with a preface. “…effective engagement with Pakistan, we believe, is critical to promoting the consolidation of democratic institutions and economic stability, and supporting the government’s counter-terrorism activities and capabilities. As a matter of longstanding principle, the Department of State opposes conditions to the release of appropriated foreign assistance funds,” Mr .Kirby said.

Pakistan has not been able to get the Taliban to the negotiating table in Afghanistan as it had promised, and the U.S. is increasing its engagement with India on Afghan, including on security related issues, much to the discomfort of Pakistan. Mr. Olson and Peter Lavoy, Senior Director for South Asian Affairs at the National Security Council visited New Delhi en-route to Kabul recently where they met senior Indian officials including NSA Ajit Doval.

Contract for Lockheed Martin

Lockheed Martin Corp, manufacturers of F-16s, has been lobbying hard for the Pakistan deal, but the setback coincided with a $1.3 billion contract Pentagon announced on Monday for the F-35 Joint Strike Fighter jet program. The new order is for 13 F-35s, the fifth generation stealth fighters. The Joint Strike Fighter program is estimated to cost $379 billion for adding 2,457 aircraft, the costliest Pentagon acquisition ever.