They are usually the ‘invisible men’, but with Choppergate all over us, arms dealers are again the talk of the town. The question is, with India now the largest arms importer in the world, can we wish them away? Are they unrealistic, the policy guidelines laid down by the government vis-a-vis the arms agents? After all, international trade continues to flourish in other sectors with the open participation of agents, why keep the arms pliers in the shadows? Gulshan Luthra, editor of defence and trade magazine India Strategic, says, “The rulebook says no serving personnel can interact with a foreign supplier. But navigating the bureaucracy and negotiating and balancing policies and procedures is far from easy. Which is why, whether the government accepts it or not, these men who purportedly don’t exist actually do.”
Twelve years after it was made mandatory in 2001, even today nobody has come forward to register as a defence agent with the Union ministry of defence (MoD). This is because any commission paid to an Indian citizen for an arms deal is automatically a criminal offence, forcing suppliers and agents to look for ever more devious ways to account for such payments.
The guidelines requiring the agents to register, explained an unofficial ‘defence agent’, were too intrusive and arbitrary. Full disclosure of the commission paid, bank details etc may even expose them to extortion, he says. And with defence deals often taking a decade or more to wrap up, the agents will in any case be vulnerable to changing policies, investigations and litigation.
So, with no official avenues open, networking is the name of the game. A trade magazine insider, speaking on condition of anonymity, says, “We’ll never officially admit to it but if you take a close look at the parties hosted by us and the guest list, you will realise that we are in fact setting the ground for future interactions. An informal introduction with a service chief by a retired chief, and the stage is all set.”
As insider status is crucial; agents or conduits tend to be related to high-level politicians, bureaucrats, senior defence officers, even entertainers— perhaps also the reason why the CBI routinely fails to crack defence deal cases. For example, one of India’s most high-profile arms agents now, Abhishek Verma, comes from a leading Congress political family and is said to be close to the CBI top brass too.
Once upon a time, a certain Sudhir Choudharie was the most powerful middleman in India. In the last couple of decades, though, a new crop has risen. Almost all major overseas defence firms now have offices or liaison bureaus in India, with local representatives to push their case. The latter, in turn, have on their rolls a full retinue of retired military officers and civil servants.
Among the new breed are, of course, the Tyagi brothers from the latest AgustaWestland chopper scandal. They have been operating in the power sector for a while now. Rajeev Tyagi, known in power circles as ‘Docsa Tyagi’, is a doctor by training but doesn’t have a practice. He operates out of an office in Ferozeshah Market in Delhi. Unlike other ‘agents’, Rajeev is usually seen in kurta-pyjamas. It is through him that the other two brothers started operating in power circles, brokering deals.
An insider who knows them well says, “The three brothers—Sanjeev, Rajeev and Sandeep—are close to several top bjp leaders too. In fact, Rajeev Tyagi’s proximity to former PM A.B. Vajpayee was well known. He was even an unofficial interlocutor between Muslim leaders upset over the Babri mosque demolition issue and the then BJP government at the Centre.”
Arms agents are candid— commissions on deals are paid everywhere, but they are among the highest in India. A normal commission ranges between 2-5 per cent of the total contract value but in India it fluctuates from 5-15 per cent. This is because, as one agent puts it, “the risks are higher and the recipients many more”.
They also claim to be even-handed while dealing with political parties, cultivating and paying off politicians across the spectrum, both in the ruling coalition and the opposition. Defence deals, especially high-value ones, take a long time to be finalised and often span over a decade. No agent can afford to take a chance and needs to keep everyone in good humour, taking into account the possibility of a change of guard and government.
In the past 10 years, India’s defence forces have been on a buying spree. Close to $50 billion in purchases were made in the last decade, while this decade will see defence acquisitions worth some $100 billion more. With the elaborate checks and balances in place, it is difficult to say that greed, and not need, prompted the purchasing spree. But precisely because of the elaborate processes, the procurement process also slows down and encourages bribes at every step to speed it up.
The situation has also accrued due to the inability of domestic players like DRDOs to keep pace with the modernisation of our forces. “Our ordnance factories have failed to satisfy our defence requirements,” admits Dr Laxman Behera of the official defence ministry think-tank IDSA.
Talking about the new-age arms agent, defence analyst Rahul Bedi says, “The omnipresent agent is essentially an entrepreneur with a flair for public relations and man-management, and has become almost indispensable to the procurement process. Through experience, patience and tenacity in dealing with the Indian bureaucracy and the MoD’s hidebound systems, he unravels for his principals the complex procurement matrix.” In return, he gets a handsome monthly retainer and working expenses, and a hefty commission disbursed overseas on deal closure. Retainers ensure comfortable lifestyles and expensive offices whilst commissions could run into crores. Bedi recalls that “before the Bofors scandal, service officers were grateful for the odd Scotch whisky bottle, a carton of cigarettes or, for the more discerning, an expensive fountain pen or Havana cigar box from vendors or their local representatives”.
Nowadays, other than cash, major enticements include jewellery, property, top-end cars, overseas education for the children of military and MoD officials and often the paid lavish wedding, anniversary or birthday parties. Other enticements include sex, premium alcohol, fully paid-up overseas family holidays, golf sets, even rare pets or antique furniture for the memsahib.
Bribes aside, the arms agents do have people batting for them. Major general (retd) Mrinal Suman argues that they perform a necessary and useful task. With their domain knowledge, they can provide useful inputs on technological advancements, qualitative requirements and price-fixing besides providing after-sales support. Treating them like dirt, he adds, has not really helped.
The CHOPPERGATE is most IDEAL for cancelling for payment of KICK BACKS as 1-- the country supplying HELICOPTER itself have declared that KICK BACKS have been paid, 2-- cancelling VVIP HELICOPTER DEAL will not affect DEFENCE PREPARDENESS in any way. So the deal should be cancelled immidiately. Let AUGASTA WESTLAND get back the Rs 350 CRORE KICKBACK it paid to everyone including Rs 200 CRORE from the "FAMILY". ------------------------------------------------------------------------- Why waste more CRORES on CBI INVESTIGATION & JPC when CBI & JPC have NEVER EVER got back the CRORES paid as KICKBACKS in any SCAM???
"Nowadays, other than cash, major enticements include jewellery, property, top-end cars, overseas education for the children of military and MoD officials and often the paid lavish wedding, anniversary or birthday parties." I was wondering how do children of every senior government official manage overseas scholarship. Hmmmmmmm the answer lies within inverted commas.
Need is to have transparency and simplicity in government servants rather than in rules. Rules can be taken care of.
Oops i forgot Jijaji scam of Haryana.
Corruption is inevitable part of our governance system where each and every government servant acts like a businessman who has any say in any matter in finalising a deal. Rules are very simple. Suppliers to government stand to make profit by supplying material to government and hence must share the profits with those who facilitate purchase on behalf of government. Which is simple give and take business where government officials give business and earn a part of profits that supplier stand to gain from the deal. It is our fault that we confuse simple business with corruption. It is high time legislative happy government of india brings a legislation legalising such business deals by government servants and must encourage such business practises so that words like armsgate, choppergate, coffingate, 2G scam, CWG scam, SG scam may be made past of forgotten history. I suggest GOI must urgently issue an ordinance nabling the government employees to sell thier legal and administrative authority that they possess under law in exchange for money so that we may forget words like corrupt and corruption.
We at Outlookindia.com welcome feedback and your comments, including scathing criticism
1. Scathing, passionate, even angry critiques are welcome, but please do not indulge in abuse and invective. Our Primary concern is to keep the debate civil. We urge our users to try and express their disagreements without being disagreeable. Personal attacks are not welcome. No ad hominem please.
2. Please do not post the same message again and again in the same or different threads
3. Please keep your responses confined to the subject matter of the article you are responding to. Please note that our comments section is not a general free-for-all but for feedback to articles/blogs posted on the site
4. Our endeavour is to keep these forums unmoderated and unexpurgated. But if any of the above three conditions are violated, we reserve the right to delete any comment that we deem objectionable and also to withdraw posting privileges from the abuser. Please also note that hate-speech is punishable by law and in extreme circumstances, we may be forced to take legal action by tracing the IP addresses of the poster.
5. If someone is being abusive or personal, or generally being a troll or a flame-baiter, please do not descend to their level. The best response to such posters is to ignore them and send us a message at Mail AT outlookindia DOT com with the subject header COMPLAINT
6. Please do not copy and paste copyrighted material. If you do think that an article elsewhere has relevance to the point you wish to make, please only quote what is considered fair-use and provide a link to the article under question.
7. There is no particular outlookindia.com line on any subject. The views expressed in our opinion section are those of the author concerned and not that of all of outlookindia.com or all its authors.
8. Please also note that you are solely responsible for the comments posted by you on the site. The comments could be deleted or edited entirely at our discretion if we find them objectionable. However, the mere fact of their existence on our site does not mean that we necessarily approve of their contents. In short, the onus of responsibility for the comments remains solely with the authors thereof. Outlookindia.com or any of its group publications, may, however, retains the right to publish any of these comments, with or without editing, in any medium whatsoever. It is therefore in your own interest to be careful before posting.
9.Outlookindia.com is not responsible in any manner whatsoever for how any search engine -- such as Google, Bing etc -- caches or displays these comments. Please note that you are solely responsible for posting these comments and it is a privilege being granted to our registered users which can be withdrawn in case of abuse. To reiterate:
a. Comments once posted can only be deleted at the discretion of outlookindia.com
b. The comments reflect the views of the authors and not of outlookindia.com
c. outlookindia.com is not responsible in any manner whatsoever for the way search engines cache or display these comments
d. Please therefore take due caution before you post any comments as your words could potentially be used against you
10. We have an online thread for our comments policy:
You are welcome to post your suggestions here or in case you have a specific issue, to directly email us at Mail AT outlookindia DOT com with the subject header COMPLAINT