India has decided to cancel a scandal-tainted helicopter deal with Anglo-Italian firm AgustaWestland, three sources said, drawing a line under a dispute that has embarrassed a government heading into elections due next year.
The decision could re-open the contract to rivals, including United Technologies Corp’s(UTX.N) Sikorsky Aircraft, EADS'(EAD.PA) Eurocopter and Lockheed Martin(LMT.N).
It comes ahead of a meeting due to be held on Wednesday between executives from AgustaWestland, a division of Italian defence group Finmeccanica(SIFI.MI), and the defence ministry officials to discuss the contract.
Scrapping the 560 million euro deal to buy 12 helicopters to transport top politicians will not necessarily lead to New Delhi blacklisting Finmeccanica, sources have previously said, a move some officials fear would set back efforts to modernise India’s military.
A defence ministry spokesman did not immediately respond to requests for comment.
The deal for the AW101 helicopters went off track in February after the then-chief executive of Finmeccanica was arrested by Italian police for allegedly paying bribes to secure the deal, prompting India to freeze payments.
Italy and India are separately investigating the allegations. AgustaWestland and Finmeccanica deny any wrongdoing.
