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.
