India may lift the ban on Italian conglomerate Leonardo in an effort to sustain the momentum of modernisation of the armed forces. AgustWestland, the helicopter manufacturing unit, was part of the Leonardo group. India cancelled the deal in 2013 for VVIP helicopters for the IAF on charges of `3,600 crore kickbacks.
Consultations are now on between the Defence Ministry and Law Ministry to look into all the legal angles before giving the go-ahead to the Italian company to do business in India, sources said here on Saturday.
However, the lifting of the ban may be partial and the ongoing investigations by the Central Bureau of Investigation (CBI) and the Enforcement Directorate (ED) into the helicopter deal scam will continue, they clarified. Also, Leonardo cannot claim any compensation for the earlier deals, sources said adding the lifting of the ban is conditional.
Sources said the removal of the ban will allow India to access world-class technology for some projects like Black Shark torpedo for the Scorpene submarines now under construction at the Mazagon Docks Limited(MDL). The navy needs these torpedoes for more lethality. The torpedoes are manufactured by one of the subsidiaries of Leonardo group.
They said discussions were on at various levels in the Government and with Italy regarding the removal of the ban. The VVIP helicopter scandal erupted in late 2010 and early 2013 in Italy.
Later, the Italian Government even arrested some Augusta Westland officials in connection with alleged kickbacks. The then Defence Minister A K Antony cancelled the deal in 2013.