File photo of Defence Minister Manohar Parrikar
A new government policy legalizing middlemen in arms purchases - a source of massive controversies in the past - will be in place soon, Defence Minister Manohar Parrikar has said.
"The middle men have to be declared and their commission cannot be linked to the outcome of negotiations," Mr Parrikar told NDTV on Tuesday.
The government will also allow these agents to participate in meetings to help the company they represent, the minister said, since it may not be possible for official representatives to attend all meetings in India.
Middlemen or defence agents were banned for years after the multi-million dollar scandal in the 1980s involving alleged kickbacks paid to politicians and officials in the purchase of Bofors guns when the Congress was in power.
In 2003, a report recommended legalizing middlemen and making negotiations transparent, but it failed to end corruption as no agent registered with the government.
Mr Parrikar said the ministry could give conditioned and limited approval to dealing with banned defence firms.
The government has taken the bold step to boost defence procurement at a time the country needs critical technology and equipment systems but faces hurdles with many foreign manufacturers finding it difficult to negotiate the Indian environment and the language. Recently, Mr Parrikar cancelled the purchase of mine sweeper ships - which the Navy needs desperately for the security of its ports - after the South Korean manufacturer declared to the government that it had used the services of a Delhi-based agent for his English-speaking skills.
Mr Parrikar said the defence ministry will announce a more liberalized export regime centred on Prime Minister Narendra Modi's "Make in India" vision.
"Private companies must be allowed to export defence equipment made in India, and for that rules will be changed," Mr Parrikar said and added that the foreign ministry would soon come out with a list of countries and equipment that cannot be exported.
Currently, private companies can't export weapons, equipment or components without clearance from the Government.