Skip to main content

India Exempts Some Arms Deals From Offsets

India Exempts Some Arms Deals From Offsets


As of last month, India no longer requires industry offsets when buying arms or defense gear from other governments, but does require technology transfer in such offset-exempt deals, an Indian Defence Ministry procurement official said.
In 2005, India overhauled its policy on arms import deals worth more than $71 million, requiring the foreign vendor to invest 30 percent of the contract’s value in private or state-owned enterprises in India.
New Delhi expects offsets, including the new technology provisions, to bring $1.25 billion to such enterprises over the next five years, said Kiran Chadha, who runs the Defence Ministry’s Defence Offset Procurement Agency. The value of technology offsets will be calculated by a Defence Ministry team.
Chadha said the new provisions would bring to India missile technologies, electronic warfare and other kinds of technology.
The first offset contract under the new provisions was signed in March, a $15 million purchase of Elta medium-power ground radars. The Israeli firm will buy $5 million in components from private Indian companies Larsen & Toubro and Astra Microwave of Hyderabad.

Russia Stands To Gain

Indian sources said Russia would likely benefit most from the offset exemption because most Indo-Russian contracts are negotiated between the two goverments.
Last month, the upcoming purchase of 30 Sukhoi Su-30MKI combat jets was exempted. Future deals to co-produce a fifth-generation fighter jet and the Multirole Transport Aircraft will also likely receive exemptions.

It is not clear whether exemptions will cover contracts negotiated through the U.S. Foreign Military Sales program, as the Indian government is still examining the issue.
A Defence Ministry official said that officials are still calculating the offset for the $700 million purchase of 197 Eurocopter AS 550 C3 Fennec helicopters for the Indian Army. Eurocopter beat out Bell Helicopter’s Bell 407.
The official said the Indian government has accepted the demands of private companies, which asked to be treated the same — as far as being the beneficiaries of offsets — as state-owned firms Bharat Electronics Ltd., Hindustan Aeronautics Ltd., Bharat Earth Movers Ltd. and Bharat Dynamics Ltd.
The 2005 offset policy left confusion about what kinds of investment could be offered as an offset, so in late 2006 the Defence Ministry set up the Defence Offset Facilitation Agency to help facilitate the policy.
The Defence Ministry will not allow joint ventures in energy infrastructure and water to count toward offset requirements because they don’t directly benefit local defense companies. - India Exempts Some Arms Deals From Offsets - 04/20/07 12:10


Popular posts from this blog

Pakistani firm whose chemicals were used to kill US troops seeks subsidy for Indiana plant

By Jennifer Griffin, Justin Fishel
Published March 22, 2013

A Pakistani fertilizer maker whose chemicals have been used in 80 percent of the roadside bombs that have killed and maimed American troops in Afghanistan is now seeking U.S. taxpayer subsidies in order to open a factory in Indiana. 
The request appears to be on hold pending further review, but the situation has stirred outrage in Congress, where some accuse the Pakistani government of halting efforts to clamp down on the bomb-making. 
For the past seven years, the U.S. government has known that the raw material calcium ammonium nitrate, or CAN, is making its way across the border into Afghanistan where the Taliban use it to fuel their most deadly weapons, namely the improvised explosive device. IEDs have long been the number one killer of U.S. and coalition troops. 
The material largely comes from Pakistani fertilizer maker the Fatima Group. But the Pakistani government has stymied attempts by the Pentagon to stop the flow of the…

Menon meets Karzai, discusses security of Indians

Kabul/New Delhi/Washington, March 5 (IANS) India Friday said that the Feb 26 terror attack in Kabul will not deter it from helping rebuild Afghanistan as National Security Adviser Shivshankar Menon met Afghan President Hamid Karzai in Kabul to review the security of around 4,000 Indians working in that country.

Menon, who arrived here Friday morning on a two-day visit, discussed with Karzai some proposals to bolster security of Indians engaged in a wide array of reconstruction activities, ranging from building roads, bridges and power stations to social sector projects.

The Indian government is contemplating a slew of steps to secure Indians in Afghanistan, including setting up protected venues where the Indians working on various reconstruction projects will be based. Deploying dedicated security personnel at places where Indians work is also being considered.

Menon also met his Afghan counterpart Rangin Dadfar Spanta and enquired about the progress in the probe into the Kabul attack in…

Revathi from Karnataka got selected in Civil Services

Miss. Revathi from Karnataka got selected in the civil services became IAS. Above is the picture of her house. She is the role model for everyone. Let's congratulate her.