Offensive DefencePrivate Sector

Deliver offsets: Foreign defence vendors must not be allowed to escape technology transfer obligations

In an indictment of the defence offset policy, the CAG has slammed French firms Dassault Aviation and MBDA – the main companies in the Rs 59,000-crore contract for 36 Rafale fighter jets – for their failure to transfer advanced technology to India so far.

As per the fighter deal, the French firms are required to plough back 50% of the contract value as offsets. But the CAG report tabled in Parliament says that the two firms have hitherto failed to deliver on their promise to discharge 30% of their offset obligations by offering high technology to DRDO. In fact, DRDO in April 2016 had identified six new technologies to be acquired from the French companies. None of them has fructified yet.

This is a serious issue as defence offsets, particularly in the form of technology transfers, are crucial to upgrade India’s defence industrial base and push along indigenous production. We simply can’t continue to import all high tech defence platforms we need.

India is already the world’s second largest arms importer, yet suffers from shortages of critical weapons platforms. India’s fighter squadrons will soon be down to 27 from a sanctioned strength of 42 despite the induction of the 36 Rafales.

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