Russia, US, Iran, Indian Muslims to blame for Israeli IAI MRSAM deal row: Report

A news report published by the Jerusalem Post has blamed the controversy over the $1.4 billion Medium Range Surface to Air Missile (MRSAM) contract awarded to Israel Aerospace Industries (IAI) on Russian and US defense companies, Muslims in India and has speculated on the involvement of Iran as well, in attempting to scuttle the deal.

According to the report, ‘Muslim political parties in India as well as Russian and American defense corporations are suspected of working behind the scenes to torpedo a $1.4 billion deal signed recently between Israel Aerospace Industries and India for the development of a missile defense system, Israeli defense establishment officials said on Wednesday.’

The report entitled US, Russia, Indian Muslims out to down IAI deal quoted Israeli defense officials as saying ‘it appeared that pro-Muslim political opponents of the New Delhi government as well as competing defense companies from around the world were spreading rumors of financial irregularities to damage Israeli-Indian defense ties…The Muslim opposition to the deal could be backed by Iran, which last year tried to thwart the launch of an Israeli spy satellite from India. The IDF’s Operation Cast Lead in the Gaza Strip in January was also playing a role in stirring opposition to the deal.’

The Jerusalem Post reported: ‘Officials said it was possible that Russian defense companies were also working behind the scenes to sabotage the deal’, also pointing out Israel overtaking Russia as the largest defense materiel supplier to India.

StratPost had earlier reported a guarded statement issued by IAI which denied allegations of wrong doing in the contract without mentioning any specific country, contract or customer. “IAI’s management wishes to make it clear that these claims and articles have no basis in reality and, in any event, have not emanated from IAI.’

Israeli business news daily Globes had reported that ‘IAI stated that it delayed announcing the contract until now because the customer (i.e., the Indian government) informed the company that early disclosure was liable to cause material difficulties in execution of the contract, and even result in its cancellation’.

Readers may recall criticism of the deal has centered on the charging of six per cent of the project value as ‘business charges’ by IAI, with some reports alleging the head to be a cover for commissions paid to middlemen. There was also criticism following reports mentioned above of the alleged secrecy about the contract imposed by the Indian government and the reportedly ‘hurried’ conclusion of the deal just before the announcement of the schedule of the general elections. Allegations have also been raised that this deal has come at the cost of India’s indigenous Akash missile program.

The spokesman for the Congress Party (the lead member of the ruling United Progressive Alliance) Abhishek Manu Singhvi had denied any wrongdoing on the part of the government to Hindi news agency UNI Varta. “These are wild and baseless allegations, not even credible charges, and do not deserve any response. So far as involvement of six per cent charges is concerned, these are legally permissible charges meant for bank guarantees, transportation and warranty charges. The six per cent is not commission, as they are alleging,” he is reported to have said.

The news agency PTI had also earlier reported similar denials by the Congress, saying the party ‘rubbished the Communist Party of India – Marxist’s (CPI-M) demand for a Central Bureau of Investigation (CBI) probe into alleged kickbacks’.

IAI is still under investigation with regard to the Barak missile deal where it has been charged with the alleged payment of bribes in a contract signed in 2000.

The total project is reported to be valued at around $ 2 billion with the Indian partner DRDO getting an around $ 600 million share in the project.

India is already buying the Spyder surface-to-air system and Phalcon AWACS aircraft from Israel.