Wednesday, March 7, 2012

EXCLUSIVE! Offsets policy stuck on multiplier clause?

Neelam Mathews
March 7, 2012

The new offsets policy that was to be released in August last year, is finding itself caught between two lobbies- one that wants to incorporate the multiplier clause and on that doesn’t.

“There is a lack of consensus in the MoD. Besides, with the ruling party having performed miserably in the recent state elections, Congress might not want to make any moves for fear it might become an electoral issue that could affect its chances for elections in 2014. 

"Dogged by the Bofors scandal that brought the government down in the past, I expect they’ll lie low and major decisions might take a backseat.” an official tells Aerospace Diary. We also learn the recent affinity to Western systems might also have brakes pulled on them.

Indian manufacturers want the plug pulled on multipliers in the offset policy while their foreign counterparts have been pushing for them. “The Indian industry is not mature as yet. Once in 2-3 years, manufacturing gets moving, benefits can get maximized. It is too early to impose multipliers," says an industry official.

Interestingly, transfer of technology is intrinsically linked to multipliers and are an outcome of TOT as they are linked with first time exports.

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