Bribery Scandals Rock Indian Defense Establishment

Two scandals involving French arms deals in India have sent shockwaves through the Indian defense procurement establishment in recent weeks. The first, a $600 million deal with EADS to purchase 197 light helicopters, has been officially canceled. The Indian Ministry of Defense has not given any official reason for scrapping the deal, but senior sources indicate that it was because of the use of a local intermediary, a practice banned under Indian law. The contract to supply the Indian Army with light helicopters will be re-submitted for bids.

The second and much larger scandal recently prompted an Indian court to order a probe into the possibility that bribes were paid so that the French company Thales would win a $3 billion contract to build six Scorpene class diesel-electric submarines. The Scorpenes were to have been built entirely in India, and have also been sold to the Chilean and Malaysian navies.

All concerned in France deny these allegations. The French bribes were believed to add up to roughly $100 million.

French President Nikolas Sarkozy is set to visit India on January 24th, and has approved the creation of a Franco-Indian defense commission to iron out these disputes before his arrival.

Bribery is nothing new to India, especially in the Defense Ministry. It has been only six and a half years since Defense Minister George Fernandes was forced to resign in a major scandal involving bribery in arms procurement.

Sources: AFP, CNN