Offset Policy In Defence Procurement: Recent Developments

To ensure flow of benefits to the domestic industry either by way of transfer of technology to the buyer country or in the form of investments or an obligation on the supplier/vendor to promote local manufacturing, many countries impose conditions of offset while entering into significant defence contracts with suppliers. Following the same rationale, India too adopted an offset policy in 2005. Revised over the years on various counts, the current offset policy ("Offset Policy") is contained in the Defence Procurement Procedure ("DPP") 2013.

With a view to boost the domestic defence industry, the Government has since 2015 introduced certain critical amendments to the Offset Policy. A snapshot of the same is given below: