NEW DELHI — The Indian government could overlook allegations of bribery by Rolls-Royce, according to a source in the Indian Ministry of Defence. The British company would have to be prepared to assist India in its jet engine development program for future indigenous fighters, however.
Another MoD official was optimistic that "India will continue to do business with Rolls-Royce."
But Vivek Rae, MoD's former director general for defense procurement pointed to a reportedly new blacklisting policy, which provides alternative options, including heavy fine.
"MoD would need to weigh the costs of blacklisting before acting in the matter," he said. "In the past, blacklisting decisions have been taken regardless of costs."
In reference to potential cooperation between Rolls-Royce and India on jet engine technology, Amit Cowshish, a former MoD additional financial adviser, said: "I am of the view that the guidelines leave enough room for MoD to continue with such cooperation under any contract it may have signed, if it so decides."
Rolls-Royce said in a statement: "Although there has been a good deal of conjecture in the press (referring to alleged corruption charges), we are not aware of there being a formal investigation underway. We have been cooperating with the authorities in India completely.
"We will not tolerate business misconduct of any kind."
Rolls-Royce has also embarked upon an ethics and compliance improvement program supported by Lord Gold, a leading international expert in this field.
Cooperation between the company and India on engine development would run parallel to yet another program between Safran of France and India's Defence Research and Development Organization, or DRDO, to finish the indigenously developed Kaveri engine. That engine would be used on the upgraded version of the homemade Light Combat Aircraft as well as the Advanced Medium Combat Aircraft, which is still in the early development phase.
India requires about 5,000 aero engines over the next several years to meet the needs of 300 to 400 fighter jets and 800 to 1,000 helicopters.
The first MoD source said Rolls-Royce is "coming up a in a big way" to tap the engine market here in addition to joining hands with DRDO to jointly develop a gas-turbine engine.
Rolls-Royce opened a new defense service delivery center in Bangalore on April 20 — the first outside the U.S. and U.K. — aimed at providing localized engineering support and solutions to an estimated 750 Rolls-Royce engines used by the Indian Air Force and Indian Navy.
"The support center is big enough to meet all Jaguar, Mirage, Sea King and other helicopter programs," an official at HAL said. "They (Rolls-Royce) have good support of U.S., and this will help them in many ways."