We are back in scam season, or so it seems. The latest spate of revelations in the controversial but aborted deal to procure 12 VVIP helicopters from the now-defunct Italian company, AgustaWestland S.p.A has again put the spotlight on the murky world of defence deals.

The latest controversy is borne out of a judgement delivered by the Milan Court of Appeals, which, overturning an earlier judgement by a lower court, said that there is enough evidence to suggest that kickbacks were given in the $450 million deal to buy helicopters to ferry the President, the Prime Minister and other top ministers. The court even indicted former Indian Air Force chief, retired Air Chief Marshal S P Tyagi and his close family members, accusing them of receiving money.

Interestingly, although it does not indict them or even accuse them of corruption, the judgement does name Indian National Congress president Sonia Gandhi and her close aide and senior party leader Ahmed Patel, by referencing a letter written by a defence middleman Christian Michel, the son of Wolfgang Max Michel, a British businessman, who had been an active player in India in the 1980s.

Whatever the facts of the case, it has set off a political maelstrom, aided and abetted by a febrile media, which threatens, at the very least, to snowball into a controversy reminiscent of the Bofors scandal of 1987, which effectively brought down the Rajiv Gandhi government.

It’s tough to compete with Bofors as far as shock value is concerned. The kickbacks amounted to approximately $9.5 million and corruption became a taint that Congress has struggled to scrub off its reputation. However, the roots of India’s relationship with scams lies much further back in time.

Independent India’s first defence scam was the “Jeep Scandal” of 1948, involving the import of 200 jeeps for the army. V K Krishna Menon, the then Indian high commissioner to the United Kingdom, was embroiled in it. The jeeps were rejected by the Indian army for being sub-standard, but had to be used any way because they’d been paid for. Menon resigned from his position, but was swiftly appointed union defence minister. Despite this deal causing huge personal embarrassment to Prime Minister Jawaharlal Nehru, the case was closed in 1955.

And corruption wasn’t just limited to defence. It became endemic as scam after scam followed. Ironically enough, in 1957, it was Rajiv’s father Firoze Gandhi who exposed what came to be known as the “Mundhra Scandal”. In this, it emerged that a businessman Haridas Mundhra had defrauded the Life Insurance Corporation of India. This eventually led to the resignation of Nehru’s finance minister, TT Krishnamachari.

A litany of scams followed in the coming decades. From cement to urea, sugar to fodder, coffins to coal, stock markets to the airwaves, there wasn’t anything that wasn’t scammed.

Everyone who could, gamed. And this in perhaps the most regulated system outside the communist world. In fact, if you were an ambitious businessman, not doing so put you at a disadvantage, for the elaborate system of licenses and permits (the ‘License quota Raj’ as it came to be called), would muzzle you. No wonder some of the biggest corporates in India continue to be embroiled in scams that go back decades.

Coming back to defence procurement itself, the Jeep Scandal proved to be a sign of things to come. It should have been properly investigated and exemplary punishment should have been meted out, and India should have at least attempted to develop a robust military-industrial complex involving both private and government owned companies, along with research agencies like the Defence Research and Development Organisation (DRDO) and the three armed forces themselves.

But none of that happened and India today is the world’s largest importer of arms, with 70% of its inventory being of Russian origin. And then there are the scams.

India has since seen more than half a dozen high profile defence scandals, and scores of smaller ones. Each time an alleged scam comes to fore, not only does the deal have to be re-tendered, the vendor in question is blacklisted. There are instance of defence deals that have been hanging fire for decades for this reason.

This means India’s defence preparedness takes a direct hit. A delay in signing several big ticket deals, like the much hyped fighter jet deal, has meant that not only have the Indian armed forces failed to modernise adequately, the government would also have to shell out significantly more more money because of cost escalations.

And when you are constrained to import, you have no choice but to deal with shadowy middlemen and arms dealers. Although following the Bofors scandal, middlemen in defence were officially banned, it is an open secret that several among them continue to operate unhindered.

When in December last year, defence minister Manohar Parrikar said he was working on changing the defence procurement policy to legally allow middlemen to operate in India, it sparked off a fierce ethical and legal debate. In fact, in 2002, the then National Democratic Alliance regime under Atal Behari Vajpayee too had made similar noises, but nothing came of it. If anything, in 2004, the Congress led United Progressive Alliance government introduced a so-called “integrity clause” in defence pacts of Rs 100 crore and more, effectively making middlemen illegal.

While middlemen operating legally and under strict regulation can be useful for companies looking to wade through India’s bureaucratic mess, ultimately, the government needs to curb corruption, and this cannot happen till local companies bag big contracts and the country begins to indigenise its arsenal.

The Narendra Modi government has pushed hard to make defence a cornerstone of its ‘Make in India’ policy. However, foreign companies, unwilling to part with patents for cutting edge technology, have so far remained only on the sidelines, effectively stalling local manufacturing form taking off.

So, in all, this really is the proverbial chicken and egg situation, which seems unlikely to change anytime soon.