Vivek Raghuvanshi
NEW DELHI — After nearly thirty years, India is allowing overseas original equipment manufacturers (OEM) to hire defense agents per new guidelines in the Defence Procurement Procedure 2016 policy, according to an Indian Ministry of Defence (MoD) official.
"The main aim of the new policy (allowing agents) is to place responsibility and pressure on the OEM into bringing transparency to the existing relationships (while dealing with defense deals) in India. It may not stop the practice of alleged kickbacks but it will put the responsibility on the OEM," said the official, who spoke on condition of anonymity.
On the new policy, retired Indian Navy commodore and defense analyst, Anil Jai Singh, said: "It appears that the MoD plans to introduce adequate safeguards to ensure that there is no malafide activity and they must have good reason to reintroduce agents into the procurement process."
India banned the hiring of defense agents in 1989 after allegations of kickbacks surfaced against the former Rajiv Gandhi government in the purchase of 410 FH 77B Howitzers from erstwhile Bofors of Sweden (now BAE Systems) by the Indian Army in 1986.
So cautious was the United Progressive Alliance government on hiring defense agents that it made it mandatory for every overseas defense company, at the time of submitting their bids, to file an indemnity bond stating that they would not hire defense agents.
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