NEW DELHI: The government has taken off two major Israeli arms companies, Israeli Aerospace Industries (IAI) and Rafael, from the blacklist of firms with whom business dealings are suspended or restricted.

Junior minister for defence Subhash Bhamre told Rajya Sabha on Monday that this decision was taken in a review meeting of senior defence ministry (MoD) officials, led by the director-general (acquisitions), after the CBI filed a closure report in court in the corruption case involving them. “Accordingly, the case has been reviewed and the restriction has been removed,” he said. The MoD had removed the two firms from the blacklist in April.

The MoD in February had issued a vigilance circular which said four foreign and two Indian arms companies were blacklisted or “debarred” by the government, while dealings were “suspended” with another 14 and “restricted” with four, as was first reported by TOI.

With the removal of IAI and Rafael from the list with whom “restricted procurement” are allowed based on operational urgency, national security and non-availability of other alternatives, engine manufacturer Rolls Royce and TATRA truck manufacturer (Czech Republic) now remain in this category. 

Israel is India’s second-largest defence supplier, with sales worth around $1 billion every year. Of the several projects currently underway, IAI and DRDO are jointly developing a long-range surface-to-air missile (LR-SAM) system for Rs 2,606 crore to arm Indian warships and a medium-range SAM system for IAF at a cost of Rs 10,076 crore.

The six blacklisted or debarred companies are Singapore Technologies Kinetics (STK), Israel Military Industries (IMI), Rheinmetall Air Defence (Zurich) and Corporation Defence (Russia) as well as Indian firms T S Kisan & Co (New Delhi) and R K Machine Tools (Ludhiana). No business dealings are allowed with these six firms till 2022.