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No middlemen in defence deals, says Antony

Coming out strongly against the involvement of middlemen in military deals, Defence Minister A K Antony...

Coming out strongly against the involvement of middlemen in military deals, Defence Minister A K Antony on Friday said the new procurement policy will strictly enforce the integrity pact that bans the role of arms agents.

“We are very clear. As far as defence contracts go, we will not allow middlemen in deals. We will strictly adhere to the integrity pact,” the minister said, after releasing the new defence procurement policy on Friday.

Admitting that discrepancies in evaluation trials had led to cancellation of a $600 million tender to procure Light Helicopters last year, he said the new defence procurement policy will have strict rules to make field trials as objective as possible. “Trials have always created controversy. Because of controversy, we were compelled to cancel a major procurement process. We have learnt from the cancellation, there will be room for manipulation (in the new rules),” Antony said.

Emphasising on the need of speedy indigenisation, Antony said the new policy would encourage private players to participate in defence production and called upon the industry to help reduce dependence on foreign suppliers. “A country as large as India cannot keep depending on foreign vendors for defence supplies even after more than 50 years of independence,” he said.

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The minister also came out strongly against the practice of calling in the armed forces to deal with law and order problems. Antony said that the Armed Forces should only be called as a last resort when all other measures, including paramilitary forces have not been successful. “Law and order is the responsibility of the state and if they want central paramilitary forces can be called. We do not encourage the idea of armed forces becoming an extended paramilitary force,” the minister said.

The Army has been repeatedly called in to enforce law and order this year, the latest incident being the flag march in Ahmedabad after the serial bombings last week. Earlier, the Army was called in to control the Gujjar agitation and the violence in Kolkata.

New defence procurement policy

Methodology to be followed would be specified to all vendors at the tender stage to ensure transparency. Result of trial evaluations, which were being conveyed verbally, would now be given to all participants in written form


Policy will strengthen role of technical oversight committee that vets field evaluation. The committee that includes a member from the DRDO and a defence PSU will enforce trial methodology specified in the tender. For procurements that involve more than one armed force, a ‘multidisciplinary trial team’ will be set up

Policy aims at easing entry of private sector players in defence manufacturing and gives foreign companies an option to bank offsets that are compulsory for all major defence deals

While all foreign companies need to invest at least 30% of the contract value of all deals worth more than Rs 300 crore in India, the new policy allows companies to ‘bank’ their money in anticipation of winning a deal

Policy focuses on speedy acquisition of defence systems


Integrity pact has also been modified to include all cases in which procurement value exceeds Rs 20 crore

Only contracts exceeding Rs 100 crore would need to be brought before the Defence Acquisition Council for approval

First published on: 02-08-2008 at 11:33:40 pm
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