A No. of Seminars and Wksps are scheduled on Offsets During the Def Expo 2010 to advocate & understand issues relating to the Defence Offsets in the Indian Context.
Any 'imported model' of offsets will not work for India for variety of reasons. We need our own model with a view to realise 'near-self-reliance' in Defence - and we are on course. My views on certain 'hotly' debated / to-be-debated points on defence offsets are discussed briefly in the succeeding paras, advocacy by certain interested parties notwithstanding.
FDI: It relates to Corporate Governance and how much equity in the JV Indian Corporates can hold with their present state of fund position in strategic Indian Industry like A & D. I feel 26% present limit is adequate with proviso to enhance it on case-to-case basis. This provides due flexibility in structuring any JV.
ToT: It is extremely difficult to valuate technology, but we do have models and experience to valuate the ToT realistically. ToT can be paid upfront, and also its cost component built-in the main contract for manufacturing in India knowing fully well that direct offset obligations would need to be discharged. I think with 'open and pragmatic' negotiations, this could be tackled.
Multipliers: This could be revisited in case of critical technologies. ToT and Multipliers are related to an extent.
Banking: This could be revisited. Trading of banked offsets could be permitted after certain period, say 4 - 5 years.
Indirect Offsets: This could be revisted, may be after gaining experience in direct/quasi-direct offsets. We could consider dual-usage products/services and certain infrastructure projects which have a direct bearing on India's Defence.
Defence Offsets India Fund: This needs to be created. Could act as a 'pool' for inbound and outbound offsets. It is not yet on the 'screen' anywhere.
Tax Structure: To be such NOT to put indigenous defence industry at disadvantage in competition.
Indian Defence Industry could be enhanced through offsets in line with our strategic objectives provided Foreign Suppliers and their Governments see India as their long-term strategic partner, a credible design & supplier base with substantial 'inter-dependence' created with the Indian Defence Industry. At this juncture, India Defence is a 'Buyers Market', we must lead to a win-win.
Sukhwindar
Any 'imported model' of offsets will not work for India for variety of reasons. We need our own model with a view to realise 'near-self-reliance' in Defence - and we are on course. My views on certain 'hotly' debated / to-be-debated points on defence offsets are discussed briefly in the succeeding paras, advocacy by certain interested parties notwithstanding.
FDI: It relates to Corporate Governance and how much equity in the JV Indian Corporates can hold with their present state of fund position in strategic Indian Industry like A & D. I feel 26% present limit is adequate with proviso to enhance it on case-to-case basis. This provides due flexibility in structuring any JV.
ToT: It is extremely difficult to valuate technology, but we do have models and experience to valuate the ToT realistically. ToT can be paid upfront, and also its cost component built-in the main contract for manufacturing in India knowing fully well that direct offset obligations would need to be discharged. I think with 'open and pragmatic' negotiations, this could be tackled.
Multipliers: This could be revisited in case of critical technologies. ToT and Multipliers are related to an extent.
Banking: This could be revisited. Trading of banked offsets could be permitted after certain period, say 4 - 5 years.
Indirect Offsets: This could be revisted, may be after gaining experience in direct/quasi-direct offsets. We could consider dual-usage products/services and certain infrastructure projects which have a direct bearing on India's Defence.
Defence Offsets India Fund: This needs to be created. Could act as a 'pool' for inbound and outbound offsets. It is not yet on the 'screen' anywhere.
Tax Structure: To be such NOT to put indigenous defence industry at disadvantage in competition.
Indian Defence Industry could be enhanced through offsets in line with our strategic objectives provided Foreign Suppliers and their Governments see India as their long-term strategic partner, a credible design & supplier base with substantial 'inter-dependence' created with the Indian Defence Industry. At this juncture, India Defence is a 'Buyers Market', we must lead to a win-win.
Sukhwindar
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