India on Tuesday barred Italian conglomerate Finmeccannica and its subsidiary AgustaWestland from bidding for future contracts but allowed it to carry out ongoing contracts.
The ban came a month after all deals with the Italian firm were put on hold following AgustaWestland's alleged involvement in paying bribes to bag the Rs3,600 crore VVIP helicopter contract.
Issuing the directive, defence ministry officials, however, clarified that the ban would not apply to VVIP helicopter contract to the IAF as the deal was cancelled in January this year.
The partial ban imposed by the defence ministry said the Italian company and its subsidiaries will not be allowed to bid for future contracts and "where the tender process is on-going but no vendor has been declared lowest bidder, Finmeccannica may not be considered provided the tendering can be satisfactorily completed with other competitors."
However, the Ministry provided relief to the firm as it allowed the armed forces to go ahead with the contracts that are already under execution. The Services were also allowed to procure spares and go for upgrades even if "the contract has already been executed," the order said.