Indian Defence Offset Policy is continuously evolving, as it should be. With the size of defence offsets due and desire of foreign vendors to partner more with the Private Defence Industry in India for obvious advantages, various defence policy researchers have been propounding liberlising the Policy to include areas that are complementary/supplementary to defence, and thus enhance country’s strategic needs in allied areas. The Govt. is not averse to this idea. MoD however has to discuss the changes pragmatically.
Svipja has always maintained that we must permit defence offsets, direct and indirect, in the Industry to consolidate our high-tech reach. May be we lay down certain % of offsets for direct and indirect; say 60:40. We also support multipliers and ToT for offset credits amongst few others discussed on this Blog earlier.
As per Business Standard , the following amendments to the offsets policy may come-up for discussion in a DAC/MOD Meeting on 15 Dec 2010:
• Liberalising the policy to permit indirect offsets in civil aviation and homeland security. Currently, vendors must discharge their offset obligations entirely within the defence industry.
• Expanding the definition of services that qualify as offsets. Currently, those that qualify for defence offsets are “maintenance, overhaul, upgradation, life extension, engineering, design, testing of defence products, defence related software or quality assurance services”. Many more are being considered, including training.
• Allowing transfer of technology to be eligible for offset credit. So far, the MoD has insisted it will pay upfront for technology, as a part of the main contract. Now, by providing technology as an offset, a vendor could discharge his offset liability.
• Permitting foreign vendors to invest ‘in kind’ in Indian defence industry. Presently, the policy permits ‘direct foreign investment’. Permitting investment in kind would allow vendors to claim as offsets the supply of goods and services, e.g. training simulators.
Full Report : Offset Policy Debate
We need to wait and watch, advocacy notwithstanding.
Svipja has always maintained that we must permit defence offsets, direct and indirect, in the Industry to consolidate our high-tech reach. May be we lay down certain % of offsets for direct and indirect; say 60:40. We also support multipliers and ToT for offset credits amongst few others discussed on this Blog earlier.
As per Business Standard , the following amendments to the offsets policy may come-up for discussion in a DAC/MOD Meeting on 15 Dec 2010:
• Liberalising the policy to permit indirect offsets in civil aviation and homeland security. Currently, vendors must discharge their offset obligations entirely within the defence industry.
• Expanding the definition of services that qualify as offsets. Currently, those that qualify for defence offsets are “maintenance, overhaul, upgradation, life extension, engineering, design, testing of defence products, defence related software or quality assurance services”. Many more are being considered, including training.
• Allowing transfer of technology to be eligible for offset credit. So far, the MoD has insisted it will pay upfront for technology, as a part of the main contract. Now, by providing technology as an offset, a vendor could discharge his offset liability.
• Permitting foreign vendors to invest ‘in kind’ in Indian defence industry. Presently, the policy permits ‘direct foreign investment’. Permitting investment in kind would allow vendors to claim as offsets the supply of goods and services, e.g. training simulators.
Full Report : Offset Policy Debate
We need to wait and watch, advocacy notwithstanding.
Svipja Technologies
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