NEW DELHI: India's past experience of cancelling ongoing defence contracts have been far from happy, with ministry of defence having to cope with serious financial repercussions while struggling to maintain systems already in its possession.
It was in the late 1980s that India got into the business of blacklisting defence firms if they were found engaging middlemen and paying bribes for procuring defence contracts. The Rajiv Gandhi government move to define such a strict policy was prompted by the Bofors scandal.
To stem the tidal wave of protests against those close to prime minister Rajiv Gandhi allegedly receiving kickbacks in the Bofors deal for purchase of artillery guns, the Congress government blacklisted the Swedish firm in 1987. This ban was lifted only in June 1999, during Kargil conflict when the Bofors guns proved their efficiency but were severely crippled by shortage of spare-parts.
The ghost of Bofors continues to haunt the Indian Army, which has not been able to buy a modern artillery gun since the blacklisting. Worse, the entire transfer of technology of Bofors lay ignored until a few years ago, and India made no effort to even start making them.
A few months after the Bofors blacklisting, emerged the HDW scandal, in which the German submarine maker told the Indian ambassador to that country about commissions being paid to middlemen for securing the contract. The company disclosed the kickbacks when India was negotiating with HDW for buying more submarines.
Already, under a contract signed on December 11, 1981 India had bought four submarines from HDW.
Once the blacklisting came into being against HDW in 1987, Indian navy was in a bind. The complex nato identification system for spare-parts and its inability to deal directly with a blacklisted firm forced the navy into dealing with dubious firms for years to keep the submarine fleet running.
As a result, there were recorded instances when the navy paid up to Rs 25,000 for an ordinary nut-and-bolt, which was otherwise available in market for just a few rupees.
Now as India moves to blacklisting AgustaWestland, the question is how badly will it affect the maintenance of helicopters from the UK firm including the three VVIP helicopters already with the air force, and the anti-submarine Sea King helicopters of navy. The challenges to maintenance of the helicopters could yet again kick in a debate on India's policy of blacklisting defence firms, given that India is among the world's largest importer of military wares.
As India blacklists foreign military majors, its own choice of weapon platforms is getting narrower, and this ultimately would result in New Delhi coughing up more than the market rate. Its blacklisting is leading to the creation of indirect monopolies, raising the question if there is any better solution. For now, at least defence minister AK Antony seems to be convinced that indigenization is the only magic wand against such scandals.
Past still haunts defence ministry - The Times of India from Indian Defence Forum - Defence & Strategic Issues http://defenceforumindia.com/forum/defence-strategic-issues/57320-past-still-haunts-defence-ministry.html
