India Bans six Companies from MOD Contracts

Former OFM Director General, Sudipta Ghosh

The Indian Ministry of Defence decided to debar six defense firms from further business dealings with the Ordnance Factory Board, Department of Defence Production, MoD, for a period of ten years. These companies have been blacklisted by the Indian authorities pending formal MOD decision.

The four foreign companies listed in this case are: Israel Military Industries Ltd. (IMI) of Ramat Hasharon, Israel; Singapore Technologies Kinetics Ltd. (STK) from Singapore, Rheinmetall Air Defence (RAD) from Zurich, the Swiss subsidiary of the Rheinmetall defense group and Corporation Defence, Russia (CDR), also known in Russia as ‘Corporation Zashchita’. Two Indian domestic companies are also included, TS Kisan & Co. Pvt. Ltd., from New Delhi and RK Machine Tools Ltd., from Ludhiana.

The action follows the Central Bureau of Investigation (CBI) chargesheet against former Ordnance Factory Board (OFB) chief Sudipto Ghosh, and the probe agency’s recommendation for blacklisting the six firms. The suspension will be in effect for 10 years, beginning 2012.

IMI is assumed to be the company worst hit by the Indian decision. Consequently, the decision could stymie the Israeli government’s efforts to privatize IMI, as India has been one of its primary customers. Singapore Technologies (ST) said the Indian decision has no impact on ST Kinetics’ defence business as India has not been a market for its defense export sales. Nevertheless, ST said it will seek legal advice as it intend to vigorously take actions to clear its name and defend its reputation. ST claimed the Indian MoD repeatedly stated that ST Kinetics is not blacklisted, and that the “putting on hold” of ST Kinetics’ defense business activities in India was but an interim arrangement only.