India further eases defence offsets norms

April 3rd, 2012 - 1:25 am ICT by IANS  

New Delhi, Apr 2 (IANS) India Monday further eased its defence offsets norms, saying the value of technology transfered under a deal could be written off against the obligation to reinvest 30 percent of all contracts over Rs.3 billion ($75 million). The offsets clause is expected to bring in investments of $30 billion over the next decade.

Under the Defence Procurement Procedure that was last amended in 2011, a firm winning a defence contract in India worth over Rs.3 billion will have to mandatorily plough back 30 percent of the deal amount in Indian defence, aerospace and homeland security industries.

This provision is a common practice by several nations which make defence purchases from foreign countries.

“The revised policy recognises TOT (transfer of technology) as eligible for discharge of offset obligations,” the revised provisions of offsets clause approved at the Defence Acquisition Council meeting chaired by Defence Minister A.K. Antony said.

The revised provisions also make a distinction between equity and non-equity route, that is investment in “kind” made by the original equipment manufacturer (OEM) for discharge of offset obligations.

“Investment in kind in terms of TOT must cover all documentation, training and consultancy required for full TOT (civil infrastructure and equipment excluded),” the salient features of
the new defence offset guidelines said.

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