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Defence rethink on Israel freeze
SUJAN DUTTA
New Delhi, June 8: The defence ministry is having second thoughts on its decision to freeze business with a major Israeli military firm because it is likely to boomerang on the armed forces.
The Israeli Military Industries (IMI) is a key supplier of critical equipment to Indian security forces and the ban on the firm, announced last Friday, will force the security establishment to look for alternatives that are not easy to find.
The decision is to put transactions on hold. This is a temporary measure. We are assessing what is to be done, a defence ministry source said today.
The South African firm, Denel, blacklisted in 2004, continues to be tainted. But Denel did not have as many running contracts with India as the Israeli firm does.
IMI and six other firms were blacklisted because the ministry was convinced the CBI found evidence they had bribed the former director-general and chairman of the Ordnance Factories Board, Sudipta Ghosh, who was arrested in Calcutta last month. Defence minister A.K. Antony decided to blacklist the firms even before the CBI furnished a chargesheet against Ghosh.
But the blacklisting of IMI and another firm Singapore Technologies will have a heavy immediate impact. IMI is not only a supplier of small arms to the Indian Army but also to Indian special forces.
Since the Mumbai attack last November, further orders have been placed with IMI. The firm makes the Uzi and Tavor 21 submachine guns. Variants of the guns have been supplied to Indian forces and are in use.
IMI is also a supplier of 125mm tank shells, for which it provides knowhow to ordnance factories. It recently inked a deal with the ordnance factory to revive a Nalanda plant in a Rs 2,000-crore project to manufacture propellant charges for Bofors ammunition, and another deal estimated at Rs 700 crore to manufacture Zitara carbines in an ordnance factory.
IMI has a running project to make cargo ammunition a variant of cluster bombs that rights activists rail against in a joint venture with the Ordnance Factory at Khamaria in Madhya Pradesh.
IMI was also advising the Defence Research and Development Organisation on the development of the indigenous Arjun tank for the Indian Army.
The Ordnance Factory Board was also working on a proposal from IMI to jointly develop a bomb, PB500, capable of penetrating two-metre-thick concrete.
The blacklisting of Singapore Technologies practically cancels a part of the Indian Armys artillery modernisation programme. The firm was left the only bidder with its Pegasus gun for an order of ultra-light howitzers.
The other contender, Bae Land Systems, which displayed its gun at an exhibition in Delhi, opted out of the race. With Singapore Technologies banned, the government will now have to cancel the tender unless the ban order is revoked.
