Foreign firms want India to simplify cumbersome offset policy
Pilatus sold 75 PC-7 Mk II trainers, like this Bruneian example, to India. However, the Swiss company is one of many struggling to fulfil offsets obligations. (Gordon Arthur)
While offsets are one way of upskilling the domestic industry, most foreign OEMs find India’s policy unnecessarily difficult and full of risks.
Foreign OEMs are agonising over India’s changing offsets policy over the past 15 years. Convoluted regulations have entangled them in a $100 million quagmire of penalties, lack of options when tapping local products, financial books blemished by years of pending dues, and regular threats of being blacklisted by the MoD.
It is expected that half of all contracts will be charged penalties within the next two years. OEMs have called for an end to the stalemate, suggesting an empowered dispute resolution body for legacy contracts.
They could then start on a clean page, as Defence Acquisition Procedure (DAP) 2020 can
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