Indian government officials have been accused of orchestrating a 600 billion rupee (£7.8 billion) scam after investigators found that lucrative mobile phone licences had been granted in 2007 on a “first-come, first-served basis” to “friendly companies” at implausibly low prices set in 2001.

India’s mobile industry has boomed in recent years to become the fastest-growing in the world, rendering asset prices set at the beginning of the decade ridiculously low, according to opponents of Andimuthu Raja, the Communications and IT Minister, whose department oversaw licence allocation.

Mr Raja, whose department was raided last week by the Criminal Bureau of Investigation (CBI), India’s equivalent of the FBI, has denied any wrongdoing.

The CBI, which also raided the offices of ten telecoms companies, said in a criminal filing that officials at the Department of Telecommunications had sold licences “at a nominal rate by rejecting [rival offers] without any valid reason”.

The accusations come at a sensitive time for Indian officialdom, given that public faith in it has been battered by a series of recent corruption charges.

Investigators are also inquiring into allegations that American businesses bribed officials in several Indian government departments, including the Armed Forces, to illegally secure contracts. A. K. Antony, the Indian Defence Minister, said last week that the Indian Navy was investigating claims that its officials had taken illegal payments from an American supplier over several years.

The Central Insecticides Board is also under scrutiny. Its officials are alleged to have taken bribes from Dow Chemical, the American group. DE-Nocil Crop Protection Ltd, a subsidiary of Dow Chemical, is alleged to have made improper payments of about $200,000 to Indian officials, including $39,700 to workers in the Central Insecticides Board to speed up the registration of three of the company’s products.

In another case, officials from Indian Railways, the state-owned operator of the country’s vast rail network, are accused of taking bribes from Westinghouse Air Brake Technologies Corporation (Wabtec), the New York-listed transport equipment and services group.

“Corruption in India is a low-risk, high-reward pursuit,” N. Vittal, a former head of the Central Vigilance Commission, a government body re — ponsible for tackling bribery. “In many sectors, government policy is skewed through corrupt means to keep out genuine competition and our system of punishment is lamentably weak.”

The allegations involving Dow Chemical and Wabtec became subject to investigation in India only after a letter written by Meera Shankar, the country’s Ambassador to Washington, to the office of Manmohan Singh, the Prime Minster, was made public.

Many doubt, though, that prosecutions will result. Ms Shankar wrote her letter to the Prime Minister in May, but little has been said on the matter since then.

The details of the cases cited by Ms Shankar appear to have come from US Department of Justice (DoJ) and Securities and Exchange Commission (SEC) files. The companies named in her letter had been investigated for paying bribes in the United States, but those receiving the payments have so far escaped action in India.

Wabtec entered a non-prosecution agreement with the DoJ last year. The deal related to around $160,000 in alleged payments made to several Indian government officials by Pioneer Friction, its Indian subsidiary.

The settlement came after the DoJ had changed its stance in recent years to aggressively enforce America’s Foreign Corrupt Practices Act (FCPA). The legislation is designed to stamp out bribe-paying, especially in emerging markets, but it exempts so-called “facilitation payments” to grease the wheels of commerce.

Ms Shankar also alleged that York International Corporation, one of the world’s largest suppliers of heating and air conditioning equipment, made illegal payments to officials in several countries, including India.

“An employee of the agent admitted to making routine payments to Indian Navy officials to secure business for York between 2000 and 2006. Payments were typically less than $1,000, but over time amounted to approximately $132,500 on 215 orders,” she wrote. In 2007, York International agreed a three-year deferred prosecution agreement with the DoJ, agreeing to pay a $10 million criminal penalty.

Also in 2007, the SEC fined Dow Chemical $325,000 and issued a cease-and-desist order in relation to an alleged FCPA infringement at its Indian unit. The business did not admit or deny the charge and did not respond to a request for comment.

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