Photo of Lee Hsien Loong and Modi from CNA

India officials have confirmed that Singapore Prime Minister Lee Hsien Loong told India Prime Minister Narendra Modi in their meeting last month, that Singapore will not co-produce defence-related products unless they lift the ban on state company Singapore Technologies (ST) Kinetics.

ST Kinetics was found guilty for bribery by the India courts in 2009 and was then banned for 10 years from the India market. Although Singapore is at fault, PM Lee demanded to have the ban lifted or else Singapore won’t work with India over joint manufacturing of defence equipment.

ST Kinetics was bidding for contracts involving production of howitzers and all-terrain vehicles in 2009 when it accepted an offer to pay a bribe to India’s Ordnance Factory Board to secure the lucrative contracts. The Singapore state defence company tried to appeal the sentence but lost as well.

An anonymous Indian government official spoke Times of India and said:

“It’s more about what Indian law requires than about what Singapore wants. It is India which is seeking defence co-production but this cannot be possible without the involvement of Singapore’s main defence company.”

In the meantime, the India Defence Ministry has approved a new blacklisting policy which will reduce a 10-year-ban for corruption charges in India to only 1-year. This has however not communicated to the Singapore government according to India diplomats.