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India: Helicopter Row Overshadows PM's Talks

(c) Sky News 2013

David Cameron's trade talks in India have been overshadowed by corruption allegations relating to the sale of Westland helicopters to the country's air force.

India has suspended payments to the Anglo-Italian firm AgustaWestland for 12 helicopters after an Italian investigation suggested middlemen were paid to secure the £480m deal.

It has now launched its own police investigation after the arrests of Finmeccanica (Other OTC: FINMF - news) chief Giuseppe Orsi and AgustaWestland boss Bruno Spagnolini on corruption and tax fraud charges last week.

Indian Prime Minister Manmohan Singh raised his "very serious concerns" about the case at a joint press conference with Mr Cameron, who is in Delhi on the second day of a three-day trip to the country.

"I told him that we have sought an explanation from the company by February 22 to examine if the contractual conditions on unethical practices and the integrity pact have been violated," he said.

"I have sought full assistance from the UK in this case. Prime Minister David Cameron has assured me of the co-operation of his Government in the investigation."

Mr Cameron promised to provide any information requested by the Indian authorities, but stressed that the case was for Italian investigators to probe because AgustaWestland is owned by Italian firm Finmeccanica.

The issue threatened to cast a shadow over the trade mission designed by the British premier to promote a "special partnership" between the UK and India and deepen its trade links.

At their talks, Mr Cameron and Mr Singh agreed closer cooperation over cyber-security which is expected to see the creation of a joint taskforce to share information about attacks.

They also signed a memorandum of understanding over nuclear energy which will facilitate the involvement of UK firms like Rolls-Royce in the development of India's capacity.

Mr Cameron is targeting a doubling of annual bilateral trade with India from £11.5bn in 2010 to £23bn in 2015 and both men stressed the importance of developing stronger links.

They agreed that the two countries should be "inextricably linked" in future. The British PM said he wanted to see a "very special relationship" develop.

"The potential of this relationship is immense and we are committed to working together to make sure we realise its full potential in every regard," he said.

Mr Singh said: "David Cameron's personal commitment and leadership have imparted a strong momentum to the strategic partnership between India and the UK."

The situation in Afghanistan was also high on the agenda, amid anxiety in India that it could become a destabilising force once again when British and its allies withdraw their troops.

Mr Cameron reported back on the summit he held in recent days at Chequers with the leaders of Pakistan and Afghanistan and tried to reassure India about security.

The Prime Minister also raised the possibility of India buying British-made Eurofighter Typhoon jets at the meeting.

He hopes the Indian government will reconsider its commitment to purchase a large consignment of French Rafaele fighters and opt instead for the Eurofighter, which is part-built by BAE Systems (LSE: BA.L - news) .

Speaking in Mumbai on Monday, Mr Cameron said: "I think Typhoon is a superior aircraft. It has the advantage of all the partner nations behind it.

"We can make some aeroplanes available within months because there are so many countries already using it. I will obviously make clear that Typhoon is still available."

However, in British government circles, there is little hope that the Eurofighter deal can be salvaged so the Prime Minister's energies are mainly devoted to building cooperation in other areas.

Mr Cameron later had the unusual experience of being greeted by screams of  adulation as he visited a college for girls in Delhi.

However, the screams were directed at Bollywood film star Aamir Khan rather than the PM after the actor joined him to chat with students at the Janki Devi Memorial College.

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