Monday, May 14, 2012

India signed defence offsets worth $ 4.3 bn


 The defence acquisitions of India are also proving to fruitful for the Indian defence industry which is likely to gain by defence offsets signed so far. The offset contracts value at a whopping $ 4.279 billion. Any foreign vendors entering a defence contract valuing more than Rs. 300 crores is mandated to invest 30 percent of the deal in Indian defence industry and it is called offsets. Surprisingly not a single defence offset for the Indian Army.

Here is the reply of Defence Ministry in the Parliament

The Defence Procurement Procedure (DPP) is refined and updated periodically. DPP was last reviewed in 2010 on the basis of experience gained during its implementation and feedback received from various stakeholders including Armed forces, Indian defence industry, Industry Associations and Original Equipment Manufacturers. DPP-2011 was promulgated with effect from 1st January, 2011. The amendments aim at expediting decision making, simplification of contractual and financial provisions and establishing a level playing field for the public sector and private sector.

17 Offset contracts have been signed so far with a value of about US $ 4.279 billion. Details are given in table below. The offset contracts are at various stages of execution.

The offset policy was introduced in 2005. It is a relatively new policy and in the process of evolution. The first offset contract was signed in 2007. Implementation of the Offset contract is co-terminus with the execution of the main contract as per present guidelines. Indian Industry both public and private sector are benefitting through investments and purchases by foreign vendors who have signed Offset contracts. The positive impact of Offsets on development of the indigenous Defence industrial base will be visible in the coming years.


The amount spent on Capital Acquisition from indigenous sources during the last five years is as follows:-

(Rupees in crores)


Year

2006-07

2007-08

2008-09

2009-10

2010-11













Amount spent

21612.24

17993.08

20347.74

25920.48

31444.55














The accounting system does not separately capture data regarding procurement from Indian private sector companies.


LIST OF CONTRACTS WITH 30% OFFSET CLAUSE


S. No.

Name of Scheme

Offset amount
(in US dollars)

Date of signing of contract









AIR FORCE












1

MPR

5,406,000

16.10.2007









2

Mig-29 Upgrade

308,271,669

07.03.2008









3.

Mi-17 V-5 Helicopters (MLH)

405,070,000

15.12.2008









4.

Medium Altitude EO/IR recce System for Jaguar Aircraft

21,086,031

06.02.2009









5.

P-IV (HAROP) System

44,310,000

13.02.2009









6.

C-130 J-30 ac FMS Case

219,000,000

06.03.2009









7.

Low Level Transportable Radar (LLTR)

34,750,000

29.07.2009









8.

AW 101 WIP Helicopter

224,140,000 (Euro166,878,608)

08.02.2010









9.

Sensor Fuzed Weapon

102,540,000

15.11.2010









10.

C-17 Aircraft (VHETAC - FMS Case)

1,091,700,000

14.06.2011









11.

Mirage-2000 Upgrade

592,810,000
(Euro 441,367,882)

29.07.2011









12.

MICA IR and RF Msl

386,400,000
(Euro 287,690,000)

31.01.2012









                                                Total = US $ 3,435,483,700












NAVY












1.

Fleet Tanker

55,279,455
(Euro 41,563,500)

23.04.2008









2.

Long Range Maritime Reconnaissance Anti Submarine Warfare Aircraft

641,260,500

01.01.2009









3.

Fleet Tanker under Option Clause

55,279,455
(Euro 41,563,500)

31.03.2009









4.

Air Route Surveillance Radar (ARSR)

11,164,800

06.11.2009









5.

Unmanned Aerial Vehicles (UAV)

80,774,390

04.03.2010









                                                            Total = US $ 843,758,600












                                                            Grand Total = US $ 4,279,242,300





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