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No offset obligation in defence deals lapsed in 5 years: Govt tells Rajya Sabha
No offset obligation lapsed during the last five years, minister of state for defence Ajay Bhatt said in a written reply.
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, the government told Rajya Sabha on Monday.
No offset obligation lapsed during the last five years, minister of state for defence Ajay Bhatt said in a written reply.
India’s offset policy stipulates that in all capital purchases above ₹300 crore, the foreign vendor must invest at least 30% of the value of the purchase in the country to boost indigenous capabilities.
In the case of the ₹59,000-crore Rafale deal for 36 fighter planes, this was 50%.
The quantum of offset due so far is $0.12 billion, Bhatt said.
Also Read:Airbus to deliver first C295 to IAF in September, Make in India to follow
“Penal action is taken against the defaulting vendors as per the relevant provisions of the defence offset guidelines under the applicable defence procurement procedure,” he added.
He was responding to a question from BJP MP Kirodi Lal Meena on the total value of offset contracts, offset obligations met so far and what was still due.
The ₹21,935-crore deal signed by the defence ministry with Airbus Defence and Space in September 2021 to equip the IAF with 56 C295 aircraft has an offset element of 30%, officials aware of the matter said.
Tata Advanced Systems Limited and Airbus are jointly executing the programme.
Sixteen of those planes will come from Spain in flyaway condition, while the remaining 40 are to be built in India.
The aim of the offset policy is to develop the Indian defence sector to achieve self-reliance and cut dependence on imports.
In the case of the Rafale deal, the Defence Research and Development Organisation’s (DRDO) offset share worked out to 30%, while 20% was allocated to the private sector.
India, which has sharpened its focus on building its defence capabilities, was the fourth biggest military spender in the world in 2022 after the United States, China and Russia, the Stockholm International Peace Research Institute (Sipri) said in a report published in April.
India’s military spending stood at $81.4 billion - 6% more than in 2021, and up by 47% from 2013, the report said.
In another report published in March, Sipri said India’s arms imports fell 11% between 2013-17 and 2018-22, but the country was still the world’s top importer of military hardware, and its share of the global arms imports was the highest during the last five years at 11%.
