Italy’s Leonardo Makes Comeback To The Indian Market

Vishal Thapar Feb 14, 2023

Italian Defence and Aerospace giant Leonardo has made a soft comeback to the Indian market.

A decade after the group was banned by India’s Ministry of Defence in 2014 following charges of corruption in the Rs 3,600 Crore deal for 12 Agusta Westland AW 101 VVIP helicopters for the Indian Air Force (IAF), Leonardo has put up a presence at the ongoing Aero India 2023 at Bengaluru. Agusta Westland is a part of Leonardo, earlier known as Finmeccanica, which was rebranded and restructured in the aftermath of the scam.

Despite an elaborate stall at Aero India, Leonardo’s comeback is deliberately low key and subdued, and the participating group executives are keeping a distance from media.

While the ban on Leonardo was lifted by India in November 2021, this is the first time the Italian group is participating in a public Defence and Aerospace trade show in India.

Leonardo’s display at Aero India attempts projecting its readiness to align with the Make in India agenda. The focus of its exhibit is on radars and surveillance systems, detection and protection from threats posed by Unmanned Aerial Systems (UAS) and promotion of sensors like the RAT 31DL and TMMR. Leonardo is a global leader in military surveillance systems.

“Leonardo is available to establish a long-term partnership in compliance with the “Make in India” programme to further improve the National and Defence Industries capabilities, up to the “self-reliance”,” it is stated at the exhibit.

It further states the group is “in a unique and strong position to match India’s strategic need, the strengthening of its indigenous Defence Industry and the continuous evolution of the relevant technologies and capabilities to bolster its security and prosperity”.

The Ministry of Defence banned business with the Italian group and scrapped the VVIP helicopter deal in 2014 after the prosecution of top Agusta Westland and the erstwhile Finmeccanica executives in Italy for allegedly paying bribes equivalent to Rs 360 Crore to Indian politicians, middlemen and Air Force officers to secure the contract in 2010. Agusta Westland was a subsidiary company of Finmeccanica.

Finmeccanica rebranded itself as Leonardo in 2016 and Agusta Westland is no longer a separate entity but an intrinsic part of Leonardo. The group is controlled by the Italian Ministry of Economics and Finance.

Following repeated representations from the Italian Government, India’s Ministry of Defence removed Leonardo/Finmeccanica and Agusta Westland from the list of banned entities in November 2021.

The company was allowed to resume Defence business in India on the condition that it would not make any financial claims from the Government of India for deals or agreements signed earlier. Also, prosecution in the corruption case investigated by the Central Bureau of Investigation continues in a New Delhi court. One of the prime accused, Christian Michel – the alleged middleman in the deal – continues to be detained in prison after his extradition from the UAE.

The Leonardo comeback creates more procurement options for the Indian armed forces. One of the consequences of the ban on the Italian conglomerate was the scrapping of the programme to acquire heavyweight torpedoes for the Indian Navy Scorpene submarines. The Black Shark torpedo produced by WASS from the Leonardo conglomerate. WASS was also a contender for the Naval guns programme before the ban.