ind-moc policy

India : Mr R. Gopalan speaks about Offset policy
February 13, 2008

India’s offset policy will help equip our armed forces with sophisticated technology and strengthen the technology base of the Indian defence industry, Rao Inderjit Singh, Minister of State for Defence production, said.

He was speaking at the ‘India Regional Offset Conference’ organized by the Confederation of Indian Industry (CII) along with the Defence Manufacturer’s Association of UK (DMA) and the Global Offset and Countertrade Association (GOCA), coinciding with Defexpo India 2008, to be held from 16-18 February 2008 in New Delhi. Representatives of the world’s largest defence companies from 19 countries were present at the conference.

Mr R. Gopalan, Additional Secretary, Department of Commerce, Ministry of Commerce and Industry, Government of India, spoke about a civilian offset policy.

He pointed out that more than 100 countries use counter trade, and it is a pragmatic approach that will provide 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. He also warned that offset 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 Mr Satyajeet Rajan, Chairman, Defence Offset Facilitation Agency and Joint Secretary, Ministry of Defence, Government of India.

It is an integral part of the defence procurement procedures announced in 2005 and revised in 2006. A “modest 30% offset” and adequate freedom to choose the Indian partner, ensures ‘market forces have a rightful place’.

Offsets could also be fulfilled through FDI and technology transfer, and he expressed the view that technology transfer in research and development would provide a much needed fillip to the industry. He pointed out, however, that only one offset contract had been signed so far, and India had a great deal to learn.

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