India Lifts Ban on Italian Firm Leonardo: Will Other Banned Defence Manufacturers Get Relief Next?

Leonardo, an Italian defence manufacturing firm, was banned for several years. But the ban has been lifted. Many similar firms remained banned and they include Rheinmetall and Rolls-Royce, which faces a "partial ban," as well as other firms, highly-placed defence sources said. Now, instead of looking at these on a "case by case basis," a committee headed by A. Anbarasu, director-general (acquisition) in the defence ministry will work on a new policy on these "banned outfits," and whether to engage with them and in what manner. The Anbarasu committee has just begun work and if the bans, some of them in place for years, are lifted, it can help in ensuring the armed forces are better equipped. Many firms like Rheinmetall and ST Kinetics of Singapore

have officially requested the defence ministry to lift the ban. Other firms have also been in conversation with the ministry or the government, both at an administrative or political level. The defence ministry banned several firms after the Ordnance Factory Board (OFB) bribery scam of 2009. The previous UPA government of Dr Manmohan Singh had taken the decision and it's been over a decade since the ban. And many of the bans had been for a decade, as in the case of ST Kinetics of Singapore. Banning firms, while necessary, can often be counterproductive. For, it would reduce the number of firms that the Indian government can approach either for outright sales or co-production. It reduces choice. With atmanirbharata or self-reliance the new core philosophy, it stops a banned firm from coming to India and linking up with an Indian firm to start production here, not just for the Indian security forces, but also, exports-- the "Make for the World initiative." What the Anbarasu Committee will recommend is not known, but just the setting up of a committee to examine the issue is a major step forward. Lifting the ban-- maybe, after a hefty enough fine-- can be helpful in terms of choice of purchase or more opportunities for co-production in India. The government prefers not having a single-vendor situation, and if the ban is lifted, it could lead to more (and healthy) competition.