Publication: Monitor Volume: 7 Issue: 68

Russia saw its lucrative arms trade with India come under scrutiny yesterday when a top Indian admiral suggested that Moscow’s arms dealings with New Delhi were rife with improprieties. These revelations, made by Vice Admiral Arun Prakash, threaten to drag Russia into a burgeoning arms corruption scandal which has already rocked the Indian government and cost Indian Defense Minister George Fernandes and several other top officials their jobs. Prakash’s remarks yesterday, moreover, appeared to contradict assurances Russian Deputy Prime Minister Ilya Klebanov gave last month. On March 28, Klebanov–a close ally of President Vladimir Putin who oversees Russian defense industrial matters (and who was rumored to have been a top candidate for the defense minister post that recently went to Sergei Ivanov)–categorically rejected speculation that bribes might have been involved in a series of major arms agreements which Moscow and New Delhi have finalized in recent months. The most important of these was an estimated US$3 billion agreement under which Russia licensed Indian defense enterprises to manufacture 140 Sukhoi-30MKI multirole fighter aircraft, and an estimated US$600 million deal by which India is to purchase 310 Russian T-90 main battle tanks, 186 of which are to be manufactured in India under a Russian license.

As a result of the bribery scandal, the Indian Defense Ministry has said that it will review all upcoming purchases of weaponry. Prakash’s remarks yesterday would seem to indicate that the Russian arms sales to India would not escape scrutiny. In comments to the media, Prakash charged that Indian-Russian arms dealings were completely open to fraudulent practices. “There is no transparency in the Russian system on defense deals. When the offer is made it is difficult to say whether the parts are new or vintage or whether the prices are correct,” he said. The Indian admiral also spoke of huge fluctuations in the price of hardware bought from various Russian vendors, and suggested that Soviet-era practices–in which Moscow often kept pricing details secret–have contributed to the current problems in the Russian-Indian arms trade. In addition, Prakash referred to the likely existence of shadowy “middlemen” on the Russian side, and complained that “even today, there are three Russian agencies through whom India has to negotiate to get defense equipment.” That the issue is becoming a critical one was suggested by Prakash’s assertion that “India, at the defense ministry level, is now trying to put pressure on Russia to enable direct dealings with the manufacturers instead of going through firms but has not succeeded so far” (AFP, South Nexus, April 5; Russian agencies, March 28; AP, March 18).