Two Israeli arms firms taken off restricted list by India

NEW DELHI: The government has taken two major Israeli firms, Israeli Aerospace Industries (IAI) and Rafael, off the list of armament companies with which only “restricted business dealings” are allowed due to pending corruption cases.

Officials on Thursday said the defence ministry’s reprieve for the two companies, with the approval of minister Nirmala Sitharaman, comes after a Delhi special trial court last year accepted the CBI closure report into the infamous Barak kickbacks case registered in October 2006.

The case had arisen from the initial Rs 1,160-crore deal for nine Barak-I anti-missile defence systems, along with 200 missiles worth Rs 350 crore, inked with IAI and Rafael by the then NDA government in October 2000.

The CBI case had named former defence minister George Fernandes, his party associates Jaya Jaitely and R K Jain, alleged arms dealer Suresh Nanda and former Navy chief Admiral Sushil Kumar among the accused in the case. But the CBI moved to close the case after several years, citing “lack of evidence”.

Though the MoD had put the two companies on the “restricted business” list, procurements from them had continued under special approvals due to “operational urgency, national security and non-availability of other alternatives”, said officials.

As reported by TOI last year, the NDA government had inked projects worth over $2 billion with IAI for the Barak-8 advanced surface-to-air missile (SAM) systems, which are designed to destroy hostile aircraft, missiles and drones at a range of 70-km, ahead of PM Narendra Modi’s visit to Israel.

This project for the Indian Army follows two similar DRDO-IAI programmes already under way for the next-generation SAMs for Indian warships at an initial cost of Rs 2,606 crore and nine air defence squadrons for the IAF for Rs 10,076 crore.

As per the fresh defence ministry’s list of arms companies under the scanner, four foreign and two Indian arms companies remain blacklisted or “debarred” by the government, while dealings are “suspended” with another 14 and “restricted” with two.

Global arms majors Singapore Technologies Kinetics (STK) and Israel Military Industries (IMI) fall in the first category of blacklisted firms, while Denel (South Africa), Leonardo SpA (erstwhile Italian conglomerate Finmeccanica) and its UK-based subsidiary AgustaWestland International are present in the “suspended” group.

Engine manufacturer Rolls Royce and Tatra truck manufacturer (Czech Republic) are the ones left in the restricted business list after removal of Rafael and IAI from it.