Indian news has for the past few weeks been dominated by corruption allegations and counter-allegations. That’s nothing new.
First came the Panama files, where Who’s Who of India’s elite were identified as having used the dubious tax-haven to channel allegedly illicit funds. Then came the big whammy, when an Italian court convicted senior executives of defence giant Finmeccanica and its UK subsidiary AugustaWestland of bribing to win big deals in India. The Italian court has been at pains to point out that its focus was on the “bribe givers” but alluded to significant evidence of alleged “bribe takers”, which go straight to the door of Sonia Gandhi and her close aides. Political dynamite of the highest order. The Indian government has taken the bull by its horns.
Whilst investigations continue, previous governments of all shades adopted a knee-jerk blanket “blacklisting” of companies allegedly involved in corrupt practices. This has been seen by the current administration to be detrimental to India’s interests.
These companies are by their nature often “embedded” within India’s security apparatus. By removing them and indeed their related companies (collateral damage!) from the supply chain prior to any conviction, India was (a) losing potential price bargaining power; and (b) essential supplies and technology. Some debate has already been in play in India about whether or not India should adopt a western style Deferred Prosecution Agreement arrangement, where a company comes clean, demonstrates that it has cleaned up its act, in return for paying a hefty fine and full cooperation with the investigating agencies.
Therefore, until the recent spat, the Indian home and defence ministries had been working on unveiling a much more pragmatic policy on the blacklisting. The very correct thinking being that companies, especially in defence and the broader national security arena, possess technologies and know-how that India needs.
However, given the hot political climate, the Indian government is trying to avoid any signs of weakness or compromise on corruption and is going for the jugular. This may result in great kudos in the short run from the public, but inadvertently shelve any prospect of the much-touted pragmatic policy on blacklisting. At some point political expedience (right as it is) must give way to pragmatic, firm but fair, policies that really are at the heart of India’s interests.
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