Posted by- Neelam Mathews
Aug 17, 2011
India will get its revised offsets policy in a month or two, minister of state for defense M.M Pallam Raju told Aerospace Diary.
“We improve it (policy) every year, with suggestions of industry and vendors…refine the policy as we go along,” said Raju.
Meanwhile, industry associations have been called to a meeting on August 18 by MoD to discuss the inclusion of Project Management into India’s new offset policy.
As India makes big ticket acquisitions, the schedule for production transfer is aggressive, and the technology that India expects to be transferred through co-development work generated by offsets is raising concerns among vendors about intellectual property violations and the potential for counterfeit products.
Observers say India’s lack of clarity on such violations may result in OEMs finding ways to circumvent the use of advanced technology, on the grounds that India does not have safeguards to protect manufacturers that license technology to local partners.
Aerospace Diary has a letter addressed last year to the minister of defense by various associations including AIA, BDI and GIFAS recommending increase in FDI on investment, allow dual use technologies and expand the scope of offsets- many of which the MoD has adopted. The letter asks for multipliers in offsets contracts especially in TOT and production license based projects and FDI.
The letter also calls for “One clear offset authority,” outside of the Defense Acquisition Council with decision making power to “approve contracts in a predictable, efficient and transparent manner.”
“Placing a reasonable cap on penalties inhibits industrial defense cooperation,” the recommendations say.