Seems to be a lot of flag flying and a Europe divided
However both aircraft seem to have made the shortlist on the extensive field trials! so let us for a moment assume they are theoretically on par in the varied control environment. I am also assuming their pricing was relatively similar for them to have reached the same cut off. Then it comes down to the political considerations. I am sure the following would have played a role
India - France extensive military sales relationship from Ships to planes to technology.
Mirage 2000 in Kargil
Current upgrade program for the above
Scorpene Sub program
France lifted all embargoes first post nuclear deal and has signed on fast to fund the reactors here and allow India into the nuclear club.
Lets put it this way, the French much like the Russians have too much stake in India and probably will not ditch the Indians in a tight spot. On the other Hand the Germans, British tend to tow the US line and in a potential conflict in their friendly neighborhood the French have more chances of coming thru than the rest of consortium.
Lets be realistic regardless of the typhoon or the Rafael both can probably knock the socks of the J-7 and aging F-16 aircraft so there is no real issue there. The issue is that when push comes to shove which country will stand by and which will wag their finger. That IMHO is probably first and foremost political consideration.
That said the Yanks are getting a chance in many areas and will probably take about 20 more years to build trust, till then they need to be in less critical areas of parts supply.
That said it aint over till the fat lady has sung, but either will be a better sight than the Mig 21.