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From Bofors to Rafale: Why India's defence deals are marred with scandals?
India's all big defence equipment purchase deals are always marred by allegations of kick-backs because of the country's inability in producing adequate and sophisticated weapon systems back home.

The successive governments that came to power in India have always formulated policies that encourage purchase of defence weapons from abroad as it involves high volume corruption.

The fact remains that such policies that are highly tilted in favour of overseas defence purchase make the active involvement of middlemen mandatory to create the space open for wrongdoings. Besides, the defence purchase policies are made in a manner that the engagement of top defence officials is confined only to the technical trials. The final call on the clearance of any defence deal is taken by politicians only.

The successive governments and the defence installations have always maintained that the presence of mediators is an integral part of any defence deal from both the sides as no deal could be inked without their presence. In many cases like signing of defence deals with Russia, Indian government first contact an agency that is assigned by the Russian production companies to strike a particular defence purchase deal with Indian or any other government world over, thus making the role of mediator crucial in the negotiation process of the deal.

 In an attempt to root out corruption and kick-backs in the defence deals the government led by Atal Behari Vajpayee, former Prime Minister and a top leader of the ruling right-wing Hindu nationalist Bharatiya Janata Party had initiated a move to make the role of mediators legal in any defence deal. The idea was to register all those involved in the processes of the defence purchase with India's defence ministry. However, the then government was forced to abandon the idea as none of the player in the defence weapon purchase area came forward to get registered officially because the government made the guidelines for the registration so cumbersome that none of existing and former players came forward citing strict guidelines and complicated procedure as reasons for their non-participation.

The players in the field of purchase of defence weapons has made the process so complicated that it becomes almost impossible for any government to keep the mediators out of any deal anywhere in the world as in most of the developed countries the companies negotiating on behalf of a particular country is a legal entity and no deal could be sign without their concurrence. Such mediators who are most named as agents receives a commission of one to five percent per deal. The active involvement of these agents or companies in any of the defence deal amounts to an increase in the price of a particular defence equipment or weapon system because their commission gets included at the very first stage of the negotiations.

The names of such mediators or agents have never come out in the open or proved in any court of the law because preventive measures are always taken from the time of onset of the negotiation of a particular defence purchase deal to the time of the finalizing the deal. The both sides the buyer and the purchaser during the course of the negotiations ensure that traces of money trail are never found. This is an unwritten agreement mandatory for all defence purchase deal. Precisely, that is the reason why none of the Indian courts have yet been able to prove that a particular person has taken bribe in a particular defence deal. Why such an unwritten understanding is necessary in all the defence deal is because firstly, the deal is finally signed by politicians and they are the last authority to take a final call on the price of an equipment or weapon system and secondly, the political parties spent most part of the money earned out of striking a defence deal is spent on election campaign trail.

The Indian courts failed to prove the involvement of bribery in Bofors gun purchase deal because money trail was not found during the course of proceedings in the different courts and similar thing is going to happen in Augusta Westland case. However, the recent controversy surrounding Rafale jet purchase deal is different. In this case, the main issue is not the name of the beneficiary but the name of the person who pressurized the French company to make Anil Ambani's company an offset partner despite the fact that the company came into being on few days before the signing of the Rafale jet deal.

Prime Minister Narendra Modi-led National Democratic Alliance government had recently brought Christian Mitchell, a middleman in the Augusta Westland helicopter deal, to India claiming that he will spill the beans once interrogation takes place. The Prime Minister Modi himself had claimed in his public meeting that once Mitchell reveals the name of UPA chairperson Sonia Gandhi as a beneficiary in the VVIP helicopter purchase deal that the previous Congress-led United Progressive Alliance government had signed, she would land up in jail.

The issue of bribery in any of the big military deal that any Indian government inks with a foreign company or the government is always marred by controversy. The allegations of bribery and counter allegations take place because the issue is made a political one and the elections are fought on this issue. The BJP-led opposition had made the bribery in Bofors as its main electoral plank and Rajiv Gandhi lost the general elections in 1991.

The history is repeating itself today as the then ruling and now in opposition Congress party has made Rafale jet purchase deal as one of its major poll planks. The campaign that Rahul Gandhi, the head of India's grand old party and a Gandhi scion has launched against the government in general and Prime Minister Modi in particular has taken an interesting turn because the Prime Minister has chosen to keep mum on the issue and the ministers and party spokespersons on his behalf have so far proved to be utter failure in explaining many key questions pertaining to the deal like who made Anil Ambani an offset partner in the jet deal as his company has no experience in the field of defence equipment production, why the jet were purchased at a rate much higher than the previous UPA government had agreed to buy and why the number of jets were brought down from 126 to 36 for a price of estimated to be worth 7.8 billion Euros.

The Rafale jet purchase deal came into open not because of the involvement of any domestic or foreign middleman but because of the government's decision to award the contract to a particular private company bypassing the Hindustan Aeronautics Ltd., a government owned company that has an expertise in defence production.

After Rajiv Gandhi lost elections over Bofors scandal, the politicians realized that traces of money trail could prove fatal for them in future. The next Congress government decided to insert a new integrity clause in all upcoming defence deals. Under the new clause the government is given power to scrap the deal even after its finalization in case it is found that the buyer had hired a middleman to negotiate the deal and a fine could also be levied on the seller.

The successive governments followed the new set of defence purchase agreements until Modi took the centre stage of Indian politics. After coming to power his government set aside all the amended rules from the purchase agreements and awarded Rafale jet contract to Anil Ambani raising eyebrows. Even defence officials whose participation in the negotiations was confined only up to the technical trial were opposed to the government move to scrap the deal that Manmohan Singh-led UPA government had signed.

The Indian government has been rattled by a vocal opposition campaign that has charged it with financial irregularities and endangering national security over the purchase of Rafale fighter aircrafts from French company Dassault is now soft-pedalling the purchase of other weapons badly needed by its overstretched and ill equipped military.

Indian stands at the fourth position in the world as far as the strength of its army is concerned.

A senior Indian army general had before a Parliamentary committee testified that more than two-thirds of the army's equipment was obsolete, while only eight percent remains state-of-the art. The navy and air force were only slightly better off. Yet Prime Minister Narendra Modi's BJP government, which faces general elections a few months from now, is loath to risk the political controversy that it fears might stem from buying more weaponry abroad. Similar situation had arrived when Rajiv Gandhi faced Bofors controversy.

Editorial NOTE: This article is categorized under Opinion Section. The views expressed in this article are solely those of the author and do not necessarily represent the views of In case you have a opposing view, please click here to share the same in the comments section.
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