India has canceled a €560 million ($407 million) contract to buy high-end helicopters from AgustaWestland, a subsidiary of Finmeccanica, in move that underlines the unpredictability of one of the world's biggest defense markets.
Sitanshu Kar, a ministry spokesman, said the agreement had been "terminated with immediate effect" because of "integrity-related issues" in a contract that had been dogged by allegations of corruption.
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The cancellation highlights the uncertainties of the growing Indian defense market, traditionally dominated by Russian supplies but increasingly attractive to European and U.S. companies. It also marks another blight on a corruption-ridden term of office for Manmohan Singh, India's prime minister, badly sullied by telecoms and natural resources scandals.