No offset obligation lapsed during the last 5 years: Govt.

The Indian Government has announced that the total value of offset contracts linked to defence deals currently stands at $13.21 billion, out of which foreign military contractors have submitted claims amounting to $6.85 billion.

Further, it is to be seen that no offset obligation lapsed during the last five years.

To be noted under India’s offset policy, the foreign defence entities, for all contracts worth Rs 2000 crore or more, are mandated to spend at least 30 per cent of the total contract value in India to boost indigenous capabilities.

This can be through procurement of components, transfer of technologies or setting up of research and development activities.

However, the offsets are not applicable to procurements under ‘fast track procedure’ and in ‘option clause’ cases if the same was not envisaged in the original contract.

Further, no offsets are applicable in contracts under intergovernmental agreements.

As of now, the total value of all offset contracts is USD 13.21 billion. The quantum of offset obligations for which claims have been submitted is USD 6.85 billion. 

The quantum of offset due so far is $0.12 billion. 

Also, the Government has affirmed that penal action is taken against the defaulting vendors as per the relevant provisions of the defence offset guidelines under the applicable defence procurement procedure.