By IANS
New Delhi : India’s offset policy for purchases of military hardware will leverage the country’s buying power to upgrade technology, improve infrastructure and make it part of the global defence supply chain, a seminar here was told Wednesday.
The offset policy will also help equip the Indian armed forces with sophisticated technology and strengthen the technology base of the country’s defence industry, Minister of State for Defence Production Rao Inderjit Singh said while speaking at the India Regional Offset Conference here.
Confederation of Indian Industry (CII) along with Britain’s Defence Manufacturer’s Association (DMA) and the Global Offset and Countertrade Association (GOCA) organised the conference to coincide with the Defexpo international defence exposition that opens here Saturday.
Representatives of the world’s largest defence companies from 19 countries attended the conference.
R. Gopalan, additional secretary in the Indian commerce ministry, pointed out that more than 100 countries utilise counter trade measures as “a pragmatic approach to gaining access to sophisticated technology, investment and joint ventures.
“The World Trade organization (WTO) does not ban offsets as long as there is no dumping, and it does not reduce competitiveness,” Gopalan maintained.
At the same time, he warned that offsets may increase the cost of procurement, “and therefore there could be provision for exclusion of certain purchases”.
“The Indian offset policy is a simple policy with a liberal outlook, simple to understand and operate,” according to Satyajeet Rajan, chairman of the Defence Offset Facilitation Agency (DOFA) and joint secretary in the defence ministry.
Under the offsets clause, 30 percent of all defence deals worth over Rs.3 billion has to be reinvested in India’s defence industry.
In this context, Rajan noted that offsets could also be fulfilled through foreign direct investment (FDI) and technology transfer, adding: “Technology transfer in research and development would provide a much needed fillip to the industry.”
At the same time, only one offset contract had been signed so far and “India had a great deal to learn”, Rajan said.
Ravi Parthasarathy, executive chairman of Infrastructure Leasing and Financial Services Limited, suggested the creation of an India Offset Infrastructure Fund.
“Considering India’s deep requirement for infrastructure at about $300-500 million”, he suggested that contribution to such a fund could be accepted as fulfilment of indirect offset liability.