For foreign vendors, by foreign vendors

The defence ministry’s (MoD’s) revised offset guidelines, which came into effect on August 1st, replace seven years of shifty-eyed policy that raised more questions than answers and slowed the already snail-like pace of defence

procurement. The new guidelines suggest that the MoD has listened with at least one ear to a chorus of suggestions from foreign and Indian stakeholders alike. The new rules allow transfer of technology (ToT); introduce multipliers to direct offsets towards MSMEs and the DRDO; allow vendors to discharge their offset liabilities over longer periods; and limit some penalties on vendors who fail to discharge offset obligations.

In forthrightly addressing some of these difficult issues, and in specifying a threefold aim for offsets --- nurturing internationally competitive enterprises; augmenting defence R&D; and developing civil aerospace and internal security --- the policy does well, even if the aim ends up covering too many bases.