The new Defence Procurement Procedure (DPP) allows for 'agents' of foreign vendors, but with a rider that these agents cannot get payments depending on the success or failure of a contract.
The new DPP, uploaded on the Defence Ministry's website last week, says a foreign vendor may appoint an agent but they are required to disclose this fact.
The ministry will have the right to decide if it wants to interact with a particular agent or not.
The contract with an agent will not be a conditional contract wherein payment made or penalty levied is based, directly or indirectly, on the success or failure of the award of the contract.
A pro forma for such disclosure has been prescribed, including columns for date and period of engagement, scope of work and responsibilities, terms of payment and payments received in the last 12 months.
The 'Integrity Pact' defined in the DPP meanwhile makes it clear that bidders will have to give an undertaking that they will not pay any amount as gifts, rewards, fees, commissions or considerations to any person, party or firm, including agents, directly or indirectly, in connection with the contract in question.
The Defence Ministry will also retain the right to inform a vendor at any stage that the agent engaged is not acceptable, and it would be incumbent on the vendor either to interact with the ministry directly or engage another agent.
"The MoD decision on the rejection of an agent shall be final and be effective immediately, " the DPP says.
The rules also say that the "agent will not be engaged to manipulate or in any way to recommend to any functionaries of the government of India, whether officially or unofficially, the award of the contract to the seller or to indulge in corrupt and unethical practices".
Defence Minister Manohar Parrikar has repeatedly said that the ministry is making efforts to streamline the presence of 'agents' in defence deals, an issue that has stirred several controversies in the past.