Corruption

India debars, suspends and restricts defense firms in new corruption rule

India’s Ministry of Defence has created a categorization for defense companies caught up or alleged to be involved in corrupt practices.

Under the new organization approach, defense companies caught using corrupt practices to influence contracts are now put under debarred, suspended and restricted-procurement categories.

What does this change mean?

Debarred companies — those who have previously been found corrupt — will be unable to do business in India. Suspended firms include those caught up in is an ongoing inquiry. And restricted-procurement firms are those whose credentials have suffered due to allegations of corruption, but the systems and equipment provided is essential to sustain combat readiness of the armed forces.

Since 2012, overseas defense companies — Singapore Technologies Kinetics; Israel Military Industries; Rheinmetall Air Defence of Zurich, Switzerland; and Corporation Defense of Russia — and domestic private companies — T S Kisan & Company; and R. K. Machine Tools — have been banned from carrying out business deals in India until 2024.