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09:15 AM, August 20, 2016
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Indian defense minister Manohar Parrikar (Image: Indian Express)

Defense companies investing in India will be debarred from conducting business for up to 10 years if they are found guilty found guilty of paying kickbacks to bag an order.

According to the new blacklisting policy for arms contractors finalized by the Indian defense ministry, if a defense firm is found to be guilty of paying kickbacks to get an order, the government will debar such firms for a period ranging from one to 10 years, Hindustan Times reported Thursday.

However, if no criminality is found, the punishment meted out will be less harsh. Firms guilty of procedural lapses, oversight or omission will be allowed to conduct business with the government if they agree to pay hefty fines, the news daily reported.

"We are very strongly considering a green-channel procedure for dealing with established vendors and are considering very seriously with the government for doing away with any kind of inspection in between, it will only be self-certification and there would be a penalty clause in case there is a qualitative or quantitative discrepancy in the supplies," Air Vice Marshal M Baladitya had said in July this year.

India might be considering ‘negotiated resolution’ with the accused company similar to ‘deferred prosecution agreements’ (DPA) followed by UK and US.

The investigating authorities can negotiate with companies accused of wrongdoing to pay penalties and reparations. Criminal prosecution of the company in a particular case is suspended but criminal prosecution of individuals involved in corruption will continue.

Currently, there are fifteen companies including six foreign firms that are blacklisted by MoD while 23 other companies are under scrutiny for allegations of corruption.

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