Defence Ministry revises offset guidelines

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  1. ejazr

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    Oct 8, 2009
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    Hyderabad and Sydney
    The Hindu : News / National : Defence Ministry revises offset guidelines

    Under attack for tardy acquisitions, the Defence Ministry on Monday finalised a 15-year Long-Term Integrated Perspective Plan and a slew of changes in the offset guidelines to enable manufacturers to count transfer of technology under the mandatory clause.

    Besides effecting a major change in the offset guidelines that requires foreign manufacturers to source 30 per cent of the value of an order worth over Rs.300 crore from the domestic market, Defence Minister A. K. Antony reviewed issues and proposals relating to the Army in particular.

    The announcement came a week after Chief of the Army Staff General V.K. Singh's classified communication to the Prime Minister, painting a grim picture of procurement, became public, sparking a debate on security and defence preparedness.

    The proposal to revise the guidelines was taken up at a meeting of the Defence Acquisition Council (DAC), chaired by Mr. Antony. The three services chiefs and Ministry officials attended it.

    The revised offset policy recognises investment in ‘kind,' in terms of transfer of technology, to cover all documentation, training and consultancy required for such transfer.

    The transfer should come without licence fee, and there should be no restriction on domestic production, sale or export. Investment in ‘kind' is being interpreted as an effort by the original manufacturer to assist India in building infrastructure.

    The Long-Term Integrated Perspective Plan for 2012-2027 and the Defence Plan for 2012-17, Ministry officials said, were drawn up after an elaborate process that was spread over two years and involved the Ministry, the Headquarters of the Integrated Defence Services and the Services Headquarters.

    Following the DAC approval, the unclassified version of the Long-Term Integrated Perspective Plan will be promulgated in the form of a Technology Perspective Capability Road Map to enable the Defence Research and Development Organisation, the defence public sector undertakings and industry to map out their research and development activities.

    “Both the Long-Term Integrated Perspective Plan and the 12{+t}{+h} Defence Plan chart the road map for development of capabilities for our armed forces in line with the future operational requirements and the … role the country will play within the region and outside,” the officials said.

    Mr. Antony directed the Army to streamline the acquisition process in such a way as to fix accountability in case of any slippage.

    Defence Ministry spokesman Sitanshu Kar said Mr. Antony also asked officials and the Army to consider compressing the time taken for technical evaluations and trials. He wanted more financial powers delegated to the Services Headquarters if it could lead to speedier acquisitions.

    Next meet in May

    Monday's meeting comes three months after the last meeting. The Minister decided to hold the next meeting in May to assess the progress in the implementation of the decisions taken now.

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