India Refuses to Bow to Italian Missile Maker as Blacklist Looms

India sharply responds to Italian firm Leonardo-Finmeccanica’s threat of withdrawing from its commercial interests in the country, with New Delhi saying it would re-assess all its business deals with the company.

In a strong message to Italian firm Leonardo-Finmeccanica, India's Union Minister for Communication and Technology, Ravi Shankar Prasad has said that India is unmoved by the firm's threat to withdraw its businesses from India.

"As a spokesperson of the Union Cabinet, I would like to make it clear that our government does not fear and is not moved by any kind of intimidation…The Defense Ministry would respond in the most appropriate manner to prove that this development will not hamper the modernization of the Indian Navy or the country's other security forces."

Prasad said this is in response to Leonardo-Finmeccanica's statement which read, "India is an interesting market for Leonardo-Finmeccanica, and therefore the Company hopes that an agreed and transparent solution is found as soon as possible, in order to shed light on current initiatives and future business opportunities. Should this not be the case, the Company will not refrain from assessing the situation given the limited size of the ongoing business in the country."

In a June 30 statement, Leonardo-Finmeccanica said that despite the context of uncertainty, Leonardo-Finmeccanica, in the spirit of cooperation, has over the past few years continued to supply India with the components and services essential to ensuring the operation of platforms and equipment for the country’s armed forces.

The company’s reaction comes in the wake of Indian Defense Minister Manohar Parrikar's statement to news agency PTI, which says, "Wherever there is capital procurement from Finmeccanica and their subsidiaries, all Requests for Proposals (RFPs) will be closed. I am very clear…The process of blacklisting has already been moved against Finmeccanica and its subsidiaries and regarding this a note has been sent to the Law Ministry."

Recently, Manohar Parrikar directed officials to search an alternative to Black Shark Torpedoes for IN's submarines because of the Group Company’s involvement in the 556-million euro AgustaWestland Helicopter scandal. Black Shark Torpedoes are manufactured by Leonardo-Finmeccanica’s subsidiary Whitehead Alenia Sistemi Subacquel (WASS) of Italy. Black Shark Torpedoes were going to be an essential part and primary weapon of India's six new Scorpene submarines.

Parrikar had said that India would, however, continue to accept annual maintenance and supply spare parts for defense equipment already purchased.

Leonardo-Finmeccanica and its subsidiaries supply a variety of defense equipment to the Indian Navy. Its subsidiary, Selex ES, is currently supplying a RAN 40L AESA radar system for India’s first indigenous aircraft carrier INS Vikrant. Another subsidiary, Oto Melara, is involved in naval gun manufacturing. Finmeccanica's subsidiaries also supply spare parts to Seaking helicopters-used in naval surveillance.