Tag Archives: defence production

ILN Today Post

Government to Tame the Offset Route & Encourage Private Participation in Defence Production

After the recent allegations of corruption in the defence deals, the Government is considering a second look at the Defence Procurement Procedure, the Defence Production Policy and the Defence Offset Guidelines, 2012 (“Offset Policy”). The present Defence Procurement Procedure and Offset Policy requires that in any purchase over INR 300 crore from a foreign company, thirty percent (30%) of the estimated cost of the acquisition in ’Buy (Global)’ category and thirty percent (30%) of the foreign exchange component in ‘Buy and Make’ with Transfer of Technology category should be ploughed back into India through offsets obligations. Offset obligations may be discharged with reference to eligible products and eligible services as described in the Offset Policy. Offsets are meant to improve indigenous manufacturing, engineering and technological base as well as to route investments into the domestic industry.

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