Manohar Parrikar
Defence Minister Manohar Parrikar.IANS

Indian Defence Minister Manohar Parrikar on Tuesday said that India will amend the Defence Procurement Policy by mid-February to legalise role of middlemen in defence deals.

"Representatives from defence firms are already allowed in the Defence Procurement Policy... the problem is it does not say what is not acceptable," IANS quoted Parrikar as saying. 

"Changes will be made to the DPP, representatives will be allowed but commission, or percentage of profit for the deals will not be allowed. The representative's remuneration shall be declared by the company."

The amendment introduced in Defence Procurement Policy will be forwarded to the Union Cabinet within a month and a half. Parrikar said a draft has already been prepared in this regard and the final draft will be ready in 8-10 days, after which it will be pushed forward for further procedures.

"The process shall be completed in another one and a half months," Parrikar added.

Although the ministry is legalising middlemen in defence deals, it will not allow banned defence agents under the new policy. However, banned firms can participate on certain conditions and will be given limited approval.

"Based on merit and necessity, one can think of lifting the ban to a reasonable level," he said.

The Defence Ministry has already lifted the ban on state-run Bharat Earth Movers Limited (BEML), which will be permitted to supply spare parts for Tata trucks, as long as it does not deal with the British subsidiary of the company, which was banned following irregularities.

"Limited NoC (no objection certificate) has been given to BEML because we need Tatra trucks," Parrikar said.

Along with legalising the roles of middlemen, the Centre will also give these defence agents permission to attend meetings held across the country.

India had banned middlemen in defence deals after the multi-million dollar scandal in the 1980s, during Congress' regime. Certain politicians and officials were allegedly illicitly paid in exchange of favours in the Bofors guns deal.