Policy & Government

Constant rule tweaks, corporate reluctance make India’s defence offset policy ineffective

India’s defence offset policy, introduced in 2005, has largely failed to achieve its objectives due to constant tweaks, as well as reluctance on the part of foreign defence manufacturers to take the additional cost burden of offsets, defence industry experts say.

On September 23, the Comptroller and Auditor General of India said in a report that the objectives of India’s offset policy had remained largely unachieved more than a decade after its adoption.

The CAG also slammed french aerospace firms Dassault Aviation and MBDA, the main contractors in the Rs 59,000 crore Rafale deal for the Indian Air Force, and said they had not discharged 30 percent of their offset obligations, which was to transfer high-end technology to help India’s Defence Research and Development Organisation (DRDO) develop a jet engine for the LCA Tejas.

“Till date the Vendor has not confirmed the transfer of this technology,” the CAG’s report, tabled in Parliament on Wednesday, said.

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