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Defense Deals With Russia In Trouble; Russia Refuses To Sign Integrity Pact
Daily News & Updates
India Defence Premium
Dated 4/4/2007
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India's weapons purchases have hit a major roadblock with its biggest defence supplier, Russia, refusing to sign the mandatory integrity pact for defence contracts.
Under the present defence procurement procedures, every defence contract worth more than Rs 100 crore must be accompanied by an integrity pact, an undertaking that no arms agents are involved and no commissions have been paid.
Authoritative sources in the Ministry of Defence told DNA that intense negotiations are underway between the Ministry of Defence and Russian representatives to ensure that the latterââ¬â¢s stand do not ââ¬Ådelayââ¬Â Indiaââ¬â¢s defence modernisation and massive procurement programmes.
The Russians have told the MOD that some clauses of the integrity pact ââ¬Åcollide withââ¬Â the domestic laws of the country. However, sources are refusing to confirm if the Russian reservations has got to do with the pact demanding an explicit commitment against payment of commissions and appointment of agents.
Under the integrity pact, if it is found that either side had agents or paid commissions then criminal cases can be initiated by India and the other side has to cooperate. Arms dealers are banned under the defence procurement policy 2006.
ââ¬ÅWe are trying to find a via media,ââ¬Â a source told DNA when questioned about the stand off.
Russia is Indiaââ¬â¢s biggest defence supplier and most dependable partner. Some $10 billion worth of defence contracts are now in the pipeline. However, any ââ¬Ëfresh contractsââ¬â¢ will have to wait till India and Russia resolve the standoff over the integrity pact.
ââ¬ÅWe can not give up the integrity pact because it is integral part of the DPP (Defence Procurement Policy) 2006. So, we will have to find an amicable settlement without compromising on our procurement policy,ââ¬Â a source said.
Partly because of the complications arising out of the complications thrown up by Russian stand, India is now only pursuing existing contracts and ââ¬Årepeat ordersââ¬Â.
The proposed purchase of 40 more Sukhoi 30 fighters and more than 300 T-90 tanks may go through because they are ââ¬Årepeat ordersââ¬Â, and may only require a negotiation about the present prices based on the original contracts signed earlier, sources said. But a final word can be said only after ââ¬Ånegotiations are carried out,ââ¬Â they added. India has allocated Rs 41,922 crore in this fiscal for defence purchases.
A slew of major purchases are in the pipeline, including 126 multi-role combat aircraft for IAF, substantial number of helicopters for all three forces, over Rs 30,000 crore worth of battleships, massive radar and other surveillance equipment purchases, etc where Russian equipment are leading contenders.
http://www.india-defence.com/reports/2997
Daily News & Updates
India Defence Premium
Dated 4/4/2007
Printer Friendly Subscribe
India's weapons purchases have hit a major roadblock with its biggest defence supplier, Russia, refusing to sign the mandatory integrity pact for defence contracts.
Under the present defence procurement procedures, every defence contract worth more than Rs 100 crore must be accompanied by an integrity pact, an undertaking that no arms agents are involved and no commissions have been paid.
Authoritative sources in the Ministry of Defence told DNA that intense negotiations are underway between the Ministry of Defence and Russian representatives to ensure that the latterââ¬â¢s stand do not ââ¬Ådelayââ¬Â Indiaââ¬â¢s defence modernisation and massive procurement programmes.
The Russians have told the MOD that some clauses of the integrity pact ââ¬Åcollide withââ¬Â the domestic laws of the country. However, sources are refusing to confirm if the Russian reservations has got to do with the pact demanding an explicit commitment against payment of commissions and appointment of agents.
Under the integrity pact, if it is found that either side had agents or paid commissions then criminal cases can be initiated by India and the other side has to cooperate. Arms dealers are banned under the defence procurement policy 2006.
ââ¬ÅWe are trying to find a via media,ââ¬Â a source told DNA when questioned about the stand off.
Russia is Indiaââ¬â¢s biggest defence supplier and most dependable partner. Some $10 billion worth of defence contracts are now in the pipeline. However, any ââ¬Ëfresh contractsââ¬â¢ will have to wait till India and Russia resolve the standoff over the integrity pact.
ââ¬ÅWe can not give up the integrity pact because it is integral part of the DPP (Defence Procurement Policy) 2006. So, we will have to find an amicable settlement without compromising on our procurement policy,ââ¬Â a source said.
Partly because of the complications arising out of the complications thrown up by Russian stand, India is now only pursuing existing contracts and ââ¬Årepeat ordersââ¬Â.
The proposed purchase of 40 more Sukhoi 30 fighters and more than 300 T-90 tanks may go through because they are ââ¬Årepeat ordersââ¬Â, and may only require a negotiation about the present prices based on the original contracts signed earlier, sources said. But a final word can be said only after ââ¬Ånegotiations are carried out,ââ¬Â they added. India has allocated Rs 41,922 crore in this fiscal for defence purchases.
A slew of major purchases are in the pipeline, including 126 multi-role combat aircraft for IAF, substantial number of helicopters for all three forces, over Rs 30,000 crore worth of battleships, massive radar and other surveillance equipment purchases, etc where Russian equipment are leading contenders.
http://www.india-defence.com/reports/2997
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