The country’s financial watchdog Comptroller and Auditor General (CAG) in an audit report on Management of Defence Offsets tabled in the Parliament flagged that foreign vendors made various offset commitments to qualify for the main supply contract but later were not earnest about fulfilling these commitments.
In 2005, India adopted the Offset Policy for defence capital purchases. This meant that for all capital purchases above Rs 300 crore made through imports, the foreign vendor was required to invest at least 30 per cent of the value of the purchase in India, reported IANS.
This investment was to be made in the Indian defence and aerospace sector. Various avenues were available to the vendor to discharge these offset obligations. This included Foreign Direct Investment, offering of free Transfer of Technology to Indian firms, purchase of eligible products manufactured by Indian…