Aerospace Diary

Neelam Mathews April 2, 2012 The much awaited revised offset policy is out. It reinforces its aim is to augment capacity for R&D, foster development of international competitive enterprises and give a boost to synergistic sectors like homeland security and civil aviation. The policy recognizes: TOT as eligible for discharge of offset obligations Technology acquisition by DRDO for a list of specified technologies will be treated as an eligible offset with a multiplier of upto 3. While Tier 1 subvendors can already discharge part of obligations on behalf of the main vendor, the overall responsibility will rest on the vendor. Offsets can now be discharged within a timeframe extending to two years beyond the period of the procurement of the contract Validity of Banking of offsets has been extended from 2 to seven years In the discharge of offsets obligations relating to direct export, FDI, TOT  or investment in ‘kind’ through non equity route, a multiplier of 1.50 ...

Posted by- Neelam Mathews Feb 29, 2012 Defense Minister AK Antony has asked Hindustan Aeronautics Limited (HAL) to realign its business processes for strategic alliances and joint ventures and   step up R&D efforts to remain globally competitive.  Addressing a meeting of the Parliamentary Consultative Committee Antony said HAL should partner with design laboratories like DRDO and CSIR for the development of indigenous aircraft, engines and systems. It should adopt best practices followed by the global leaders in the field of project management, quality control systems, vendor deployment and supply chain management. HAL has a turnover of over Rs.13,000 crores and is set for a quantum jump with the planned acquisition and production of Light Combat Aircraft, Light Utility Helicopter, Medium Multirole Combat Aircraft, Fifth Generation Fighter Aircraft, Multirole Transport Aircraft, Basic Trainer Aircraft in its assembly lines in the coming  years, says HAL. Keepi...

Neelam Mathews Feb 24, 2012 The discussion held yesterday (Feb 23) on ratifying the Offsets policy remained “inconclusive,” Aerospace Diary learns. A meeting of the Defense Acquisition Council chaired by Defense Minister A.K. Antony looked at proposals to amend the offsets policy, part of the DPP 2011. The industry was hoping certain issues would be cleared including transfer of technology as offsets; multipliers and offsets in commercial shipbuilding. With a central implementing body required, the DAC was to look at   the Defense Offset Facilitation Agency (DOFA) as the empowering body for offsets.

Singapore Air Show » February 14, 2012 by  Neelam Mathews India’s big-ticket military acquisitions are expected to aggressively push schedules for the transfer of production to the country’s ambitious aerospace and defense industry. But the technology that India expects to be transferred through co-development work generated by offset agreements is raising concerns among vendors about possible violations of intellectual property rights (IPR). A revised policy on offsets is expected to be released soon and the industry hopes that this will at last deal with the thorny issue of transfer of technology (TOT), whi...

Neelam Mathews Sept 22, 2011 India ’s Tier– 3 suppliers of defense products say business cannot take off till the government relooks at a clause in its offsets policy that does not permit OEMs to get offsets if they do not make the order direct. “We are getting a poor deal as a result. For instance, a foreign OEM now gives the order to a company like Tata that has a host of companies with different products. This gives the OEM benefit of offsets instead of having to source it through its partner……The products are more expensive and the benefits are not coming down to tier 3 suppliers as a result,” says Pradip Mehta, Senior Advisor, Elcom Systems, a subsidiary of the Sun Group. Mehta says the defense industry is increasingly getting dominated by large companies like L&T, Godrej, Tata and Mahindra. Elcom Systems has ambitions to join the OEM value chain for India and internationally. It is looking at manufacturing components, harnesses and avionics to tap the opportunity th...

Neelam Mathews Aug 11, 2011 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. “Should this happen, it will be a sell out. This is making legitimate, a route for agents to enter. How will counter guarantees be established and how can there be a mechanism to check if there is truth in it or not?,” an official on condition of anonymity, tells Aerospace Diary. “Tomorrow they will say use offsets for legal work too as it comes under project management,” he adds. However, there are large industry groups in India that are lobbying for this inclusion, Aerospace Diary learns.

Neelam Mathews July 27, 2011 Time- 1:43pm IST The learning never ends. India is to release another offset policy that is expected to be more consolidated and liberal, Aerospace Diary learns. The policy is expected to be released in a month or so. While the DPP 2006 will be valid for procurement procedures for the MMRCA, the offset benefits outlined in the new policy will be applicable to the MMRCA project if it is released before the contract is awarded. The new policy is required as structural changes have to be brought in.Transfer of Technology too, is a major issue. While the government is interested in giving credits, it needs to define the technology it will need. The policy expects to bring out a list of technologies that will qualify for offset credoit. For this, a set of multipliers eligible, too will need to be defined. Valuation in FDI for non-cash equity, too is being defined. In the aviation arena, there remain some irksome issues including treatment of ser...

Neelam Mathews June 18, 2011 A major change introduced by the MoD over the DPP 2011 for civil aerospace products elgible for defense offsets is that technical manuals, raw materials and training will no longer be considered.  Training aids including simulators, associated equipment, software and computer based training modules will remain. Expansion of what in a training institution is considered as offsetable. “The earlier definition was ambiguous as flying training institutions and technical institutions was a very wide descriptor which will now include CBT and simulator but training schools including training aircraft are out,” says an MoD official to Aerospace Diary. The amendment also includes the Design, Development, Manufacture, Upgrade of all types of fixed wing and rotary wing aircraft or their airframes,aero engines, avionics, instruments and related components. Other inclusions are Composites, forgings and castings, Guidance and Navigation equipment, te...