South African arms firm Denel was blacklisted after allegations of kickbacks in 2003 but the fate of Israel Aircraft Industries, which manufactures the Barak missile systems, may be different.
There are strong indications to believe that India will not act in a hurry to sever ties with the Israeli firm, which, unlike Denel, is a supplier of critical military equipment to India.
IAI is supplying the Phalcon AWACS (airborne early warning and control system) to the IAF in a deal valued at $1.1 billion. It is also engaged in upgrading the Mig-21, Mig-27, Mig-29 and Jaguars.
The country is the verge of wrapping up a Rs 1,800 crore deal to purchase quick reaction missiles - the Spyder missile system from Israel for which IAI is the main subcontractor. Unmanned aerial vehicles and fir control radars have also been sourced from it.
Given this background, defence minister Pranab Mukherjee cannot be contradicted when he says comparisons cannot be drawn between the Israeli firm and Denel. "These are totally different situations. The case of Denel and Barak is not comparable," Mukherjee told reporters on the sidelines of a function at South Block. "There is a specific case filed by the CBI in the Barak deal. It will go to the court. Let's await the decision," he said.
From anti-missile systems to UAVs and hi-tech radars to night-vision equipment, India has banked on defence ties with Israel to keep its modernisation programme on track.
Israel's Soltam 155mm howitzers are one of three contenders for the Rs 5000-crore deal to purchase about 1,000 guns. The Israelis are helping the Indians to upgrade T-72 tanks. The army has chosen the Israeli Tavor assault rifle to arm its special forces.
Minister of State for Defence Production Rao Inderjit Singh said on Thursday there was a pressing need for a public debate on whether banning companies for any wrongdoings in such sales was the answer. Singh said, "If anyone has done hanky-panky the law will take its course. But we should not have a knee-jerk reaction as this might affect the country's defence preparedness. Only a limited number of countries have developed specific capabilities and it would be wrong to close the doors on them.”
He said not even a single arms company or dealer was registered with the MoD, though many of them had applied for it a few years ago. The present government, Singh said, would have a fresh look at such registration.