The arrest of Orsi Giuseppe, chief executive officer of Finmeccanica, for alleged bribery in the sale of AgustaWestland AW101 helicopters for VVIP flights to the Indian Air Force, has again shaken India’s faith in foreign arms acquisition. Until the results of the Italian investigation and our own enquiry are presented, it is important that India continue with the helicopter deal. Corruption-hysteria leads to a blame-game which creates a pervasive reluctance to sign on the dotted line for arms acquisitions – which in turn impacts acquisition schedules that delay the modernisation process and raises the cost of the weapon system which eventually endangers national security.
Corruption in arms acquisition is a matter of critical national security. As India seeks to replace its aging defence system, it has become the world’s largest arms importer and is expected to spend more than $80 billion on new weapon systems between 2011 and 2015. As various foreign firms compete for a slice of that lucrative pie, middlemen seek to influence decisions. The hidden role of these middlemen in facilitating arms purchases was spectacularly highlighted during the acquisition of the Bofors artillery guns in the 1980s under the Rajiv Gandhi government. To date, the allegations made by Swedish prosecutors remain unproven in our justice system but by the time the Bofors acquisition ended, India had lost the opportunity for co-production of the guns at home – and bought fewer guns than required.
The lesson from the latest allegations clearly shows the dire need for India to revise its acquisition process. The Defence Procurement Procedure of 2005 allowed the Indian government to deal directly with arms manufacturers and provided an ‘integrity pact’ to allow the investigation into allegations of corruption, should they arise. Such a pact will now enable the Central Bureau of Investigation to conduct a comprehensive inquiry as directed by the Ministry of Defence. Regrettably, most investigations into defence deals end up without an indictment. A fair acquisition process must be supported by a strong investigative process to deter corruption.
The larger question is this: to what extent does corruption really affect national security? In some cases the weapons system or the equipment maybe the most effective despite the payoffs involved. The Bofors guns were praised by the Army for their high reliability in the Kargil War. The AW101 is a specialized VVIP helicopter which met the strict specifications of the tendering process; it addresses the urgent requirement to replace aging Mi-8 helicopters used for VVIP transport. Until investigations reveal any illegal actions, it is in our best interest to keep calm and carry on.
Akash Bhramchari is a Senior Researcher at Gateway House: Indian Council on Global Relations.
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