India will not become party to appeal in AgustaWestland case: Manohar Parrikar

India has the potential of developing into a hub for missile exports, says defence minister Manohar Parrikar, Italy’s move to torpedo India’s move to enter the multilateral Missile Technology Control Regime (MTCR) notwithstanding. In an interview to ET, he talks about his vision for private sector participation in defence, the blacklisting policy and the fallout of the AgustaWestland VVIP chopper scam. Edited excerpts:
Will India be party to the appeal likely to be filed in the AgustaWestland VVIP chopper case in the apex court in Italy, unlike the appeals court process in which the country stayed out?
There is no need for India to be party to the case. In the past, we were just a civil party to a case of criminal prosecution by the Italian authorities. We have got our work done; we have got access to all documents. Now there is a fight there on other legal points. Why should we be part of that? There is no reason for us to be part of the appeal. Corruption has happened and on the advice of the AG (Attorney General) we had participated as a civil party and managed to get all documents. After that it remains in their courts and we have no reason to pursue. So, the AG’s advice was not to continue (the appeal). It is an unnecessary spending of money. We could not have done anything and would just be observers. It was not required.

The defence ministry has been planning a new policy on blacklisting and agents. Will the AgustaWestland case impact this policy?
This case will have no impact on the policy. This is one of the situations (allegations of bribery or influence) that will be addressed in the policy. The blacklisting policy is not one in which someone steals something and would be let off. Bribery is considered a criminal offence for which the punishment is blacklisting.

However, for minor offences – for example, a small part of the contract has not been fulfilled like a delivery period that changes from the (required) six months to (a delayed) eight months – we will not blacklist a firm. But, for criminal matters and for national security, these are two issues where there is no such choice. There will be no compromise. We are working to upload the new defence procurement policy on the website in the next five-seven days. After that we will work out the blacklisting policy as well.

Also read: For our complete coverage on the AugustaWestland VVIP helicopters bribery case, read the stories here.

Italy torpedoed Indian bid to enter missile technology control regime: Manohar Parrikar

A major initiative in the works is a four-star chief of integrated defence staff. How soon is this likely to be finalised?
The decision is very important and is linked to taking a call on jointness (cross-service cooperation) and also on improving the teeth to tail ratio. So these three things are linked to each other. We have formed a committee under Lt Gen Shekatkar (retd) that has to give a detailed report in 90 days. In 45-50 days we will get the first report. With that and a call on jointness, we will take a decision as they have an impact on each other. I see no reason why (a decision on the four-star general) should not happen within this calendar year or in the financial year.

Exports have been a bright spot for the defence industry. Do you foresee India as a major export hub for missiles? How do you see Italy’s stand to block India in the MTCR?
We have delisted certain products from the defence list and if these are also seen, exports have actually gone up three times. In the Italian case, they have torpedoed our attempt to enter the MTCR. They have taken a stand against us that I think is not valid. We have taken this up with the external affairs ministry, but even without MTCR we can do exports. India can be a hub for missile exports; we have products like the Brahmos and Akash missile systems. It will not happen overnight and we require several things to be put in place. But yes, we have approved it in principle (missile exports) and now we are working to put together a lot of things that will make it happen.

How do you see the strategic partnership model progressing and how do you respond to charges that inviting private sector for feedback amounts to a conflict of interest?
What is wrong in asking the industry to form groups that will give us their opinion in a combined form? We have not decided on the model yet and this is just an interaction with the industry so that they can tell us how they feel. Once I learn what the industry wants, I can take what I feel is correct, fair, transparent and in the interest of the country. What I don’t see as that, I won’t take. Conflict of interest comes into picture when I appoint someone to decide on his own selection. I am not doing so. This is just feedback for which the industry has been consulted.

Our target (to complete the strategic partnership process) is by the end of July. Let’s see how fast that happens. After that it will need to go to the finance ministry, the legal department and the cabinet. It is a policy decision involving finances. After this mountain there will two or three more also to climb.

One point of concern has been the poor flow of FDI in defence manufacturing. How do you see this influencing Make in India programme?
We actually do not need FDI right now. There is no point in parking money in the banks here. FDI is needed when the factory has to start operating. How can you expect it before that? Right now you have to go on how many MoUs (memorandums of understanding) have been signed between various companies and how many industrial licences have been obtained. These are the two indicators for the defence industry right now. Investments will come when actual orders are received. And actual orders will take another six to 12 months to be placed. For the self-propelled gun project, for example, L&T (the winner) has done its own investments, so there is no problem. But when it comes to the Avro replacement project – for which Airbus has signed an MoU with Tata Advanced Systems– the money will come in when the contract is actually signed.