More Indian Defense Corruption -- But We Need The Weapons So What To Do?

(MoneyWatch)  In yet another in the continuing saga of bribes related to defense contracts the Indian government suspended seven companies with recent contracts due to bribery allegations against Sudipta Ghosh. Ghosh was the former head of the Ordnance Factories Board.

The allegations and evidence were so serious that the government decided to suspend the companies involved without waiting for a trial or conviction. Unfortunately one of the involved defense contractors is Israeli Military Industries (IMI) who make most of the small arms and ammunition for the Indian military. IMI recently signed a deal to build five factories in India to produce ordnance and ammunition. The Indian Army and Special Forces are heavily dependent on IMI for weapons.

Another company involved is Singapore Technologies. Ending their contract means that a major upgrade to the artillery equipment will have to end. A whole new contract proposal and award process would have to be completed seriously delaying the reequipping of the military with more modern and advanced artillery.

This means that India may have to reconsider ending the contracts as they require the capability being provided. Two other companies possibly related to the inquiry, Israel Aerospace Industries (IAI) and Rafael, were not blacklisted as their contracts are considered so important to the modernization of India's military.

India has turned more recently to a wider group of suppliers for military suppliers rather then relying on their traditional Russian, British and indigenous capabilities in a bid to rapidly modernize their forces. Unfortunately several major contract awards and selections have been marred with bribes and had to either be canceled or started over. This has been one of the reasons that the new helicopters the Army and Navy have tried to buy have started and stopped in fits.

Several major figures in the military and government have been investigated and arrested for taking bribes to steer contracts in one direction or another. In this case the government has decided that despite the allegations against the contractors and the government personnel the systems are too important to be canceled or delayed. It may be that no further cases of this type come forward, but it is certainly that with future contracts such as the new fighter aircraft it may happen again.