India Defence: Corruption Exposures Amongst Defence Production Surge
India’s defence production has seen a surge. Defence Minister Rajnath Singh most recently highlighted the same during a Defence Conclave on October 15, where he said, “defence production has risen to a record over Rs 1.78 lakh crore from Rs 40,000 crore in 2014, with defence exports touching an all-time high of Rs 39,000 crore from Rs 686 crore in 2013-14, and India defence products reaching nearly 100 countries. He exuded confidence that the nation would achieve defence production targets of Rs 2 lakh crore this year and Rs 3 lakh crore by 2029, and export defence equipment worth Rs 50,000 crore by 2029”.
On the same day, multiple reports broke out of two allegations of corruption in defence procurement involving Ministry Defence Public Sector Undertakings Munitions India Limited (MIL) and Bharat Dynamics Ltd [BDL] a publicly listed firm.
Munitions India Limited (MIL)
Munitions India Limited (MIL) executive director B R Anil Kumar was arrested by the Central Bureau of Investigation on Oct 13 with two others in an alleged bribery case linked to a Rs500-crore ammunition contract with private defence manufacturer SMPP Ltd.
The Print reports that a late-night hawala cash delivery to Munitions India official’s Pune home gave the CBI the first lead which led to the source Ashish Kansal, the Chief Executive
Officer and director of defence manufacturer SMPP Limited.
The delivery of cash was linked to a Rs 500-crore defence contract and leakage of sensitive information. In the First Information Report, the CBI has alleged that Kansal was in regular contact with Kumar regarding a Rs 500-crore contract awarded to the company to supply ammunition to MIL over a year. The FIR, copy is with The Print.
Separately, Businessline reported that SMPP was involved in a controversy in the past. In 2019, SMPP Limited was accused of changing the bulletproof jacket material to Chinese materials after the testing and bidding phase of a ₹639-crore contract awarded by the Indian Army ostensibly to cut off Western middlemen. What action was taken on the case by Ministry of Defence is not clear so far.
Kansal known to be prominent at many of the defence conclaves which are being held regularly now in the media circuit as money spinners financed by the defence industrial sector has also been on the Federation of Indian Chambers of Commerce & Industry’s (FICCI) Defence and Homeland Security Committee, as the co-chair and led delegations abroad.
The Ministry of Defence has now suspended the Munitions India Limited (MIL) executive director B R Anil Kumar.
Times of India stated that a senior official from the department of defence production stated that Kumar had been suspended on disciplinary grounds, “We are also planning to conduct an internal inquiry to understand at what level his involvement was in the overall dealing with a private firm and what documents he had shared with it. At this stage, MIL has been cooperating with the CBI (Central Bureau of Investigation) and will share all necessary documents sought by the agency.”
A special CBI court remanded Kumar, his brother Harshavardhan B R and businessman Ashish Kansal, the alleged bribegiver and CEO and promoter-director of SMPP, in police custody till Oct 19.
“The dealing of a high-value contract with a private firm is not done by a single official of the company. Therefore, the role of other MIL officials is also being probed,” Times of India quoted a source.
Bharat Dynamics Ltd
The second involves a publicly listed Defence PSU Bharat Dynamics Ltd [BDL] which ironically turned to award a single tender contract for optical sights for ATGMs to a company owned by the former Chairman and Managing Director Siddharth Mishra and his wife which was set up after retirement in 2024.
An investigation by the Indian Express has revealed that the BDL issued a ‘single tender’ to Aindri Defence Advisory Private Limited for the supply of 300 optical sights – within seven months – after completion of acceptance and validation tests of five sample units supplied by the company. It is common knowledge in the defence contracting circles that Single Tenders are unacceptable but, in this case, the ostensible reason was ‘urgency’ of the requirement.
The BDL has dropped India Optel Limited, a Mini Ratna PSU under the Ministry of Defence BDL from which the same type of optical sights were bought in 2024 and 2025 under competitive bids and limited to the public sector.
Aindri Defence Advisory Private Limited (CIN: U74904TS2024PTC185074) is a Private company incorporated on 01 May 2024 as per listing in the Zaubacorp website.
As per his linked in profile, Siddharth Mishra a former retired commodore of the Indian Navy is shown as, “A visionary leader and accomplished professional with a distinguished career spanning nearly four decades in the defence sector”.
There is no official reaction from the Ministry of Defence or BDL Ltd and a review would be necessary once this is received or official investigations are launched.
Legacy of Corruption in Defence Contracting
India’s Ministry of Defence has a legacy of corruption in the defence sector driven by opacity in procurements and structural weaknesses across the military acquisition system despite may attempts to reform the same through revision of the Defence Acquisition Procedure and blacklisting of companies for 10 years or more for involvement in scams.
With Armed Forces officers now directly interacting with private sector enterprises, gullible officers who have limited exposure to contracts and deals could well be influenced by veteran vendors in this field who have worked the system for years.
It is also clear that the drive for demonstrating production outcomes amidst need for defence readiness and Atma Nirbharta should be accompanied by stringent vigilance measures to ensure that the menace is controlled in time as there is a concern of more skeletons in the cupboard.
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