India’s military, one of the world’s largest weapons buyers, unveiled a new arms acquisition policy on Saturday aimed at weeding out corruption in the defense sector.
The policy announcement came just over a week after Indian Prime Minister Manmohan Singh pledged to crack down on defense corruption following a string of graft scandals that has put his government on the back foot.
The Indian Ministry of Defence said the new policy would seek the “highest standard of transparency” in arms purchases for the country’s million-plus military, the world’s fourth-largest.
“[It] aims to balance the competing requirements of expediting capital procurement ... and conforming to the highest standards of transparency, probity and public accountability,” the ministry said in a statement.
In a bid to boost India’s domestic defense industry, the policy gives first right of refusal to Indian vendors, according a “higher preference explicitly to the Buy Indian, Buy and Make Indian” approach.
Defence Minister A.K. Antony in a foreword to the policy paper said he hoped the procedure will be a “progressive step aimed at giving impetus to indigenization, creating [a] level playing field ... and expediting the procurement process as a whole.”
India is negotiating a series of huge procurement contracts, including for fighter jets, combat helicopters, as well as artillery, drones and electronic warfare systems, as it seeks to update its aging military hardware.
A week ago, Singh warned he was committed to make purchases of military hardware more “transparent, smooth, efficient and less vulnerable to unethical practices.”
In February, public anger over alleged bribes paid by Italian company Finmeccanica to secure a US$748 million contract for 12 helicopters forced New Delhi to order an investigation and suspend the deal.
Italian prosecutors suspect kickbacks worth about 50 million euros (US$64 million) were paid to Indian officials to ensure Finmeccanica’s British unit AgustaWestland won the contract, according to Italian media reports.
An Indian preliminary inquiry report has linked four firms, four Westerners and seven Indians to the bribery allegations.
The governing Indian Congress party, up for re-election in May next year, has been hit by a string of scandals.
Two ministers resigned last month after one was accused of interfering in a graft probe and another was linked to a bribery allegation.
The defense scandal erupted at a time when the government was already fighting charges by the national auditor that underpricing of the sale of telecom spectrum and cut-rate allocation of coalfields cost India billions of dollars.
The controversy paralyzed parliament and derailed measures to further open up the state-controlled economy as growth plunged to a decade-low of 5 percent in the past financial year.