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No defence co-production with India until ban on ST lifted: Singapore

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by November 19, 2016 General
While Singapore is open to the idea of defence co-production with India, it will not explore any such opportunity until the government officially lifts the ban on Singapore Technologies (ST) Kinetics, Singapore’s leading defence firm, for its alleged involvement in the 2009 Ordnance Factory Board bribery scandal.

Top sources confirmed to TOI that this had been conveyed to the government at the highest level by Singapore after India brought up the possibility of joint manufacturing of defence equipment by the two countries.

In an attempt to boost his Make In India initiative, sources said, PM Narendra Modi had himself discussed defence co-production between India and Singapore in his meeting with his counterpart Lee Hsien Loong last month.

Singapore’s position is significant as it otherwise figures prominently in some of Modi government’s flagship schemes including not just Make in India but also Smart Cities. The two countries signed the revised Defence Cooperation Agreement in 2015 and have, as the two prime ministers noted in a joint statement last month, made significant progress in defence cooperation since then.

“It’s more about what Indian law requires than about what Singapore wants. It is India which is seeking defence co-production but this cannot be possible without the involvement of Singapore’s main defence company,” said an official who did not want to be quoted.

Earlier this year, in June, the two countries had their inaugural Defence Ministers’ Dialogue which saw them exploring new areas for bilateral cooperation. The joint statement issued after the Modi-Lee meeting also noted the convening of the first Defence Industry Working Group in May 2016, the continued progress in cooperation in defence RnD and technology, regular joint military exercises and training between armies, navies and air forces. The two countries have also looked to facilitate service-to-service cooperation, naval ship visits and sharing of white-shipping information.

Defence co-production though is likely to remain elusive with Singapore insisting that the defence ministry remove the ban on ST Kinetics. The Singapore firm was among several other foreign firms which were proscribed in 2012 for 10 years.

The ban in 2012 followed a CBI chargesheet against then director general of ordnance factories Sudipta Ghosh for seeking “illegal gratification” from defence companies.

ST Kinetics had later filed a writ petition in court seeking to challenge the ban which prevents it from entering into any business deal with Ordnance Factory Board for 10 years. The company was in the running for contracts to supply howitzers and all-terrain vehicles when it was banned.

Earlier this month, the defence ministry was said to have approved a new policy for blacklisting which seeks to do away with earlier 10-year bans and instead proscribe firms only for 1 year at a time. Diplomatic sources, however, said this had not yet been communicated to Singapore authorities.

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