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The Hindu : National : "Offset policy" may fetch business

Online edition of India's National Newspaper
Friday, Jul 28, 2006

National

National

"Offset policy" may fetch business

Special Correspondent

NEW DELHI: India may get business worth $10 billion after it begins implementing the "offset policy," which makes it compulsory to source 30 per cent of all defence import deals above Rs. 300 crore to the domestic industry, said Defence Secretary Shekhar Dutt here on Thursday. The policy is in vogue in the United States, the United Kingdom, Israel and France.

Mr. Dutt was speaking at a workshop on implementation of offsets in defence organised by the Confederation of Indian Industry (CII).

Capital acquisitions

He said India would look for direct offsets in all capital acquisitions made by the Defence Ministry to strengthen the capabilities of its indigenous industry. The offsets would depend on the strategic importance of acquisition or technology, the ability of the Indian defence industry to absorb the offset and the export potential generated. India had a large industrial base and the offsets would further enhance its technical and manufacturing potential.

Maintaining that manufacturing in India would be 40 per cent cheaper, Mr. Dutt said: "We would like to pursue offsets as they will be beneficial to both the Indian industry and foreign collaborators. Offsets will also help foreign collaborators take advantage of India's software industry. There are large software technology hubs in practically all cities of India, whereas, earlier, most software development was centred on Bangalore. In addition, India has a large reservoir of technically trained manpower developed over the past few decades."

Benefits to be shared

The benefits of offset would be shared between the public and private sectors, the life cycle cost would be taken into consideration and investments in Research and Development would be encouraged.

CII Director-General S.S. Mehta said over 250 participants, including 40 foreign delegates, attended the seminar. These included the Chairman and CEO of Elul, the Israeli organisation responsible for offsets, the CEO of Blenheim Capital Partners, a major European consortium, andrepresentatives from Northrop Grumman and Lockheed Martin.

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