Indian MoD says in a parliamentary report that the value of offsets is on the rise. But foreign original equipment manufacturers (OEMs) continue to face a series of challenges in navigating the policy

The Indian Ministry of Defence (MoD) has revealed new details about the scope of defence offsets being undertaken through partnerships between foreign original equipment manufacturers (OEMs) and Indian offset partners (IOPs).

In comments to India's Parliamentary Standing Committee on Defence, which were published in a report tabled in parliament on 13 March, the MoD said that up until October 2019 it had entered a total of 54 defence offset contracts with foreign OEMs.

Of these contracts, 32 are related to Indian Air Force (IAF) procurements, with 15 and seven defence offset deals linked to Indian Navy (IN) and Indian Army (IA) acquisitions respectively.

In terms of the value of these offset contracts, the MoD said in the report that it projects that offsets worth USD11.80 billion will be discharged through OEM-IOP partnerships during the period between 2008 and 2024.

Of this amount, approximately USD2.8 billion has been discharged of which USD1.68 billion has been verified through audits. The remaining offsets are under clarification and examination, said the MoD. It added that more than 170 local firms had been selected as IOPs by foreign OEMs.

"Offset contracts are under different stages of implementation by the foreign OEMs," said the MoD in the committee's report. "Once executed, it is estimated that the respective contracts shall cause generation of substantial business to Indian industries thus strengthening the defence industrial base."