The draft offset guidelines 2020, with revamped features, is a bold attempt by the MoD to attract technology and investment and promote the export of major defence items. However, the guidelines could be further fine-tuned to keep the focus tight on their larger objectives.
In particular, the MoD may consider further refining features pertaining to the applicability of offsets to IGA/FMS procurement, quantum and threshold of offsets, specific offsets through the RFP mode, banking provision, negative multiplier, methodology for value addition, the FDI cap and, more importantly, the offset management.
The draft Defence Procurement Procedure 2020 (DPP-2020), released on March 20 for public comments, has made a substantial revision to the offset guidelines.1
The focus of the new offset guidelines is export of major defence items and investment and technology transfer.
Will the new guidelines be a game-changer in the Ministry of Defence’s (MoD) efforts at building a strong arms industry, or require further fine-tuning to achieve the aforementioned objectives?
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