The Defence Ministry has ordered a bribery investigation over the purchase of jet engines from Rolls-Royce by the state-run Hindustan Aeronautics Limited (HAL) in a deal worth at least $1.2 billion or Rs. 7426.8 crores.
The Central Bureau of Investigation will look into more than Rs. 500 crores in alleged kickbacks in the deal that was signed in 2011, a ministry official told Reuters.
No comment was immediately available from Rolls-Royce’s office in India.
Suspicions of corruption in India’s defence procurement programme have for years delayed the modernisation of India’s armed forces, forcing a heavy reliance on outdated Soviet-designed equipment.
The air force has been dogged by a series of crashes of its Russian-built MiG fighter jets, while an accident aboard a Soviet-made submarine that killed two officers last week provoked the resignation of Admiral DK Joshi as the naval chief.
The probe into the HAL deal follows the arrest in Britain last month of Indian-born businessman Sudhir Choudhrie and his son in a bribery investigation by the Serious Fraud Office into Rolls-Royce’s dealings in China and Indonesia.
Both men denied any wrongdoing and have been released on bail, their spokesman said last month.