“Technology acquisition by DRDO [Defense Research and Development Organization] for a list of specified technologies will be treated as an eligible offset with a multiplier up to three,” the defense official says.

Tier-l sub-vendors under main procurement contracts will also be allowed to discharge part of their offset obligations on behalf of main vendors. But the overall responsibility for fulfilling offset obligations will still rest with the main vendor.

Work by government-recognized R&D facilities is included on the list of eligible services for offset credits.

“This will facilitate R&D collaboration as well as direct purchase and export of R&D services related to eligible defense products from both public sector and private sector enterprises,” the defense official says.  

In exceptional cases, a change in offset partners or offset components may be permitted, provided the value of the obligations remains unchanged. This will provide greater flexibility in implementation, the official said.

Roughly $3.4 billion of those deals were for aircraft, radars, drones and other systems for the Indian air force. Naval contracts worth $843 million were approved for fleet tankers, maritime reconnaissance aircraft, radars and UAVs.

India has attracted more than $4.2 billion in defense offsets since 2007.

A.K. Antony photo: Ministry of Defense