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The Indian defense offset policy -revised guidelines.
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The 2012 Indian Defence Offset Policy- A Concise Analysis
OFFSET 2012-Concise AnalysisPage 2
Revised Indian Defense Offset Policy
The Indian MoD has just unveiled a revised offset policy. This particular document has been awaited by the Indian and Foreign stakeholders for more than 12 months now! We are happy to present to you a brief analysis of the revised policy.
The new policy has indeed moved a long way forward and incorporated several long-standing demands of the offset obligors (Foreign OEM’s). How these changes take effect on the ground, only time will tell.
Should you require a more detailed presentation, please free to get in touch and we would be happy to set-up a mutually convenient day-time slot for a presentation exclusively for your organization. This presentation would cover all the major changes to the offset policy and the impact of these changes on Offset strategies of the Global OEM’s & the Indian Offset Partners. (IOP’s)
For further details, please feel free to get in touch with:► [email protected] (Senior Manager)► [email protected] (Senior Consultant)
OFFSET 2012-Concise AnalysisPage 3
Major Additions- Avenues For Discharge
Offset Discharge
Direct purchase / Exports
FDI for manufacture
and maintenance
Investment in KIND for ToT
for manufacture
& maintenance
Investment in KIND in Indian enterprise in
terms of Provision of
equipment for manufacture & maintenance.
Provisioning of equipment and
ToT to Govt.enterprises including DRDO
for manufacture & maintenance.
Technology Acquisition by DRDO
Offset Banking
Minor Addition3.1 (b)
Minor Addition3.2
New Method3.1 (f)
New Method3.1 (e)
New Method3.1 (d)
New Method3.1 (c)
3.1 (a)
OFFSET 2012-Concise AnalysisPage 4
Major additions- Items of Discharge
Defense products• Items under Vessels of War has been expanded
Inland & Coastal Security• New items added for Vessel; Port; Harbor and
Coastal Security
Services Added• Repair• R&D services from government recognized facilities.
OFFSET 2012-Concise AnalysisPage 5
Major Additions
• Offset banking validity (7 years)• Offset Discharge beyond the
duration of the Main Contract
Time Period Enhanced
• Maximum percentage introduced.• OEM’s barred for a Fixed number of
years for non-compliance.
Penalties-Limited
• For choosing MSME’s as IOP’s.• For sharing Technology with DRDO
and Pvt. Sector.• For sharing Dual-Use technologies
Multipliers Introduced
OFFSET 2012-Concise AnalysisPage 6
Major Additions- Offset in charge
DOMW- Defense Offset Management Wing introduced; complete responsibility of ensuring a smooth Offset process post contract signing• New post- JS (DOMW)
Pre contract responsibility with Acquisition wing
• Roles of DDP & Acquisition Wing have now been clearly defined.
OFFSET 2012-Concise AnalysisPage 7
Major Additions- Clearly Defined
• For calculating % of Offsets to be credited to the OEM.Value Addition
• Development of Globally Competitive Industries
• Augmenting R&D and D&D capabilities• Encourage development of synergistic
sectors
Objective of the Offset
policy
• Clear distinction between FDI and investment in ‘KIND’
Investment for Offsets
OFFSET 2012-Concise AnalysisPage 8
Major Additions- Permitted
Change in IOP partner and Item
• With sound reasoning it is now permitted.
Extension of time period
• Permitted up to a limited extent
OFFSET 2012-Concise AnalysisPage 9
Major Additions- Reporting
• Is now a Half-Yearly requirement
Offset Discharge progress
report
• JS(DOMW) to submit an annual report on the progress of various offset programs to the DAC.
Annual Offset
Appraisal
Thank You
