Union Government approves liberalised blacklisting norms for arms companies

Nov 8, 2016 15:02 IST

The Defence Acquisitions Council (DAC), under the Union Government, on 7 November 2016 approved the guidelines for suspension or banning of business dealings with arms companies.

With the passage of new guidelines, the Union Government will no longer impose blanket bans on armament companies suspected of corruption.

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Highlights of the blacklisting norms
• The armament companies will be blacklisted only for a year at a time, instead of the existing norm of 10 years at a go, with fast-track investigations into the charges against them.
• The decision to blacklist a company will not be an executive one. It will be done in a collegiate manner by a committee which will also include the vice-chiefs of the Army, Navy and IAF.
• The operational implications of blacklisting a company will be considered before a final decision is taken. Blacklisting will be for a specific equipment or service, without blanket bans.
• Under the new nuanced blacklisting norms, procurement of spares for platforms and equipment already purchased from a company under the scanner will be allowed.
• Moreover, companies already blacklisted will now also be able to appeal to the government for a review, based on merits of a case.
• Moreover, blacklisting will be done for a specific period of not more than a year at a time, with the aim to complete investigations into the charges against a company within six months.

This easing of the blacklisting norms will be a marked departure from the indiscriminate 10-year blanket bans imposed earlier.

Presently, four major global firms like Singapore Technologies Kinetics, Israeli Military Industries, Rheinmetall Air Defence, Zurich, and Corporation Defence, Russia are blacklisted till 2022.

Other Major Approvals
The DAC also accorded initial approvals or acceptance of necessity to modernisation projects worth 82117 crore rupees.

Tejas Light Combat Aircraft

• It accorded initial approval for procurement of 83 Tejas Mark-1A fighters from Hindustan Aeronautics for 50025 crore rupees.
• The improved 83 Mark-1A jets will be inducted from 2020 to 2026.
• IAF has inducted 2 Tejas till now. By 2018, it will get the 1st full squadron (20 jets).

T-90 Bhishma main-battle tanks
• It accorded initial approval for procurement of 464 T-90 tanks from Ordnance Factory Board (OFB) for 13448 crore rupees.
• 657 T-90S tanks were imported from Russia for 8525 crore rupees from 2001 onwards. Next 1000 tanks will be licensed by Avadi Heavy Vehicles Factory.
• New 464 tanks will add to 536 already ordered tanks from OFB (300 inducted till now).

Pinaka multiple-launch rocket systems
• It approved the tender for 6 more Pinaka regiments for 14633 crore rupees.
• Army has already inducted 2 of the 4 Pinaka regiments cleared earlier.
• Pinaka, with 40-km strike range, was developed by DRDO and was manufactured by Tatas and L&T.

Light Combat Helicopters
• It provided initial approval for procurement of 15 helicopters from HAL for 2911 crore rupees
• It also provided approval to acquire 10 choppers for IAF & 5 for Army. Over 100 to be progressively ordered.


• It accorded initial approval for procurement of 598 mini-UAVs for Army for 1100 crore rupees.
• Earlier, India rejected Raven/Cheel mini-UAVs being offered by the US. Now, tender will be issued to Indian companies for the mini drones.
• Man-portable drones, with operational radius of 10-km, will provide surveillance for infantry soldiers.


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