Government Says 21 Defence Offset Contracts Worth $5.67 Billion Sealed In Last Three Years
Under India’s offset policy, foreign defence entities are mandated to spend at least 30 percent of total contract value in India.
The government said on Wednesday that 21 defence offset contracts with cumulative value of $5.67 billion have been sealed by the defence ministry in last three years.
Under India's offset policy, foreign defence entities are mandated to spend at least 30 percent of the total contract value in India through procurement of components or setting up of research and development facilities.
Replying to a question in Lok Sabha, Minister of State for Defence Shripad Naik said 21 defence offset contracts worth $5.67 billion approximately have been signed in the last three years.
"A study on impact of offsets on defence industrial base has been conducted by department of defence production through Institute for Defence Studies and Analysis," he said.
"According to the study conducted, till March 2019, MoD has signed 52 offset contracts valued at $11.79 billion to be discharged through Indian offset partners," the minister said in a written reply.
He, however, did not clarify the length of the period in arriving at the figure of $11.79 billion.
In May 2001, India opened up the defence sector to 100 percent Indian private sector participation while putting the cap on Foreign Direct Investment at 26 percent subject to licensing.
Years later, the government expanded the FDI limit under automatic route to 49 percent and above 49 percent through the government route.