February 20, 2013
India will take a “second look” at its policies on defense production and procurement to lessen reliance on imported weapons and avoid controversies such as the bribery scandal surrounding the AW101 helicopter deal with Finmeccanica subsidiary AgustaWestland.
Defense Minister A.K. Antony is urging defense forces to transform their approach of relying on imports to meet operational requirements and instead give priority to indigenization in the defense sector.
“Import should be the last resort, not the easiest resort. Indigenization of military hardware is the ultimate answer,” Antony says. “The armed forces, government, defense organization and industry should come together so that India can achieve maximum for indigenization in a reasonable time.”
His remarks come in the wake of alleged corruption in the $750 million helo deal, in which Finmeccanica subsidiary AgustaWestland has been accused of paying kickbacks worth around €50 million ($67 million) to Indian officials to secure the sale of 12 AW101 VIP helicopters to the Indian air force.
India has already received three of the helicopters, with the remaining nine due to be delivered this year. But the deal has been put on hold by Indian authorities following the arrest of Finmeccanica Chairman and CEO Giuseppe Orsi by investigators last week.
India’s Central Bureau of Investigation has begun its own probe into the deal, and the defense ministry has started the process of canceling the helicopter contract.
“We have to go to the root of all allegations [and do] whatever needs to be done to punish the guilty,” Antony says.
The defense ministry also issued a formal show-cause notice on Feb. 15 to AgustaWestland to explain within a week why the contract should not be canceled.