India removes Leonardo from list of banned companies

NEW DELHI — India on Friday lifted a ban on the Italian firm Leonardo from doing business with the Ministry of Defence.

The names of Leonardo S.p.A. and its subsidiary AgustaWestland International UK were dropped from the list of entities restricted from dealing with the ministry, an MoD official said. AgustaWestland, however, no longer exists as a separate entity, having been completely wrapped up into Leonardo.

The Italian defense company can now resume business activities with the ministry on the condition that it doesn’t make monetary claims for previously signed agreements.

The MoD official said the suspension was lifted on the grounds of operational urgency and because of a lack of available alternatives for procuring 127mm naval guns and heavy-weight torpedoes.

In 2014, the MoD canceled a €546 million (U.S. $624 million) contract signed four years earlier with AgustaWestland International UK, a subsidiary of the erstwhile Italian company Finmeccanica for the purchase of 12 AW-101 VVIP helicopters, over charges of corruption. Leonardo and all its business units were suspended from defense-related business in India for 10 years in 2015, although it has only been about six years.

Leonardo executives were unavailable for comment.

The suspension virtually blocked the supply of much-need weapons, including 127mm naval guns, Black Shark torpedoes for the Scorpene submarine and a midlife upgrade of more than 20 Sea King naval helicopters, harming the Indian Navy’s operational readiness, a senior service official said.

Independent defense industry analyst and retired Navy Commodore Mukesh Bhargava said the suspension restricted India’s options for foreign original equipment manufacturers from which the MoD could do business. In some instances, Leonardo or its business units were the preferred or sole qualified supplier, Bhargava added.

The lifting of the suspension will help Indian companies conclude negotiations with Leonardo for the transfer of technology for both existing and planned defense programs, the former naval officer said.

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