The government of India has stated that no offset obligation has lapsed in the last five years. The quantum of defence offset obligations for which claims have been submitted is USD 6.85 billion.
An offset obligation is a contractual agreement between a foreign vendor and the Indian government, in which the vendor agrees to invest a certain percentage of the contract value in India. This investment can take the form of technology transfer, joint ventures, or purchases of Indian goods and services.
The offset policy was introduced in 2005, and it is intended to promote the development of India's defence industry and to create jobs. The policy has been criticized by some for being too complex and for not being effectively implemented. However, the government has said that the offset policy has been successful in achieving its objectives.
The recent statement by the government that no offset obligation has lapsed in the last five years is a positive development. It suggests that the offset policy is being implemented effectively, and that it is contributing to the development of India's defence industry.
Here are some additional details about the offset policy:
- The offset policy applies to defence contracts with a value of more than ₹300 crore (about US$40 million).
- The foreign vendor must invest at least 30% of the contract value in India.
- The investment can take the form of technology transfer, joint ventures, or purchases of Indian goods and services.
- The offset policy is administered by the Department of Defence Production.
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