Middleman talk confuses dealers

International arms majors taking part in the DefExpo are somewhat confused about the role of middlemen in billion-dollar defence deals with “clashing views” emanating from the Ministry of Defence.

Barely two days after Defence Minister A.K. Antony emphasised that “there is no question of middlemen in defence deals”, his deputy has proposed a national debate on the role of arms agents.

Rao Inderjit Singh, minister of state for defence production, said on Monday: “The government policy does not allow middlemen. But they may be there in disguise and there could be some gray areas. There should be a national debate on whether we should register arms agents.”

Singh had made a similar proposal a few weeks ago, in his “personal capacity”, underscoring the need to promote transparency in the acquisition process.

Asked if opinion in the defence ministry was divided over the role of middlemen, he said his views conformed with Antony’s and there was no disagreement.

The fresh call for a national debate on the role of arms agents comes on the heels of two multi-billion dollar defence deals being scrapped by the government after years of trials and negotiations. One was on the 400-155mm towed artillery guns and the other was for 197 light helicopters for the army. Military expenditure over the next five years will be upwards of $30 billion.

Antony has always maintained that no middlemen would be allowed in defence deals and arms companies could face severe action if complaints of kickbacks were found to be true.

The government has appointed three independent monitors to vet all major defence contracts valued over Rs 100 crore.