Defence Offsets

The DPP has proved to be a dynamic document, with improvements with every successive version minimising ambiguities. Documents where ambiguities are either absent or minimum; documents that are transparent and are open to anyone connected; and documents that have good guidelines and directives, serve as an anchor when resolving conflicts that may arise in execution of activities in the related field. The DPP is one such document in the process of defence procurement.

• Jeyakar Vedamanickam
• July 2010
• Journal of Defence Studies

While Mahindra’s foray into defence production and the acquisition of foreign companies demonstrates the private sector’s initiative, the government needs to introduce further reforms to promote the role of private companies in Indian defence industry.

• Laxman Kumar Behera
• December 22, 2009
• IDSA Comments

The effectiveness of the procurement process needs to be viewed in context of the operational and structural readiness of the armed forces. If the existing framework proves to be weak and unable to deliver required levels of military preparedness, the framework may have to be re-laid for its effectiveness and deliverability.

• Harinder Singh
• December 03, 2009
• IDSA Comments

With the growth of the public sector in Defence Production a large number of industrial units in the Private Sector has also grown with varied scales of operation in areas like outsourcing of raw materials, components, sub-systems, assemblies and sub-assemblies.

• Narinder Gupta
• November 24, 2009
• IDSA Comments

The present global economic crisis has slowed down the growth of the Indian economy, affecting among others, the fiscal situation and the revenue mobilisation potential of the central government. Defence being one of the largest recipients of central government expenditure, the present crisis casts a doubt on the adequacy of future resources. This commentary discusses some major options that India’s Ministry of Defence needs to consider in order to withstand the likely resource constraints in the coming years.

• Laxman Kumar Behera
• May 26, 2009
• IDSA Comments

Although India has established a formal mechanism for implementation of the defence offset policy, the structure and procedures lack the thrust to fulfil the objective of energizing the Indian defence industry. Besides, the policy is not supported by the existing Foreign Direct Investment (FDI) and licensing policies. While evidence suggests that domestic industry can absorb offsets, what India needs is an effective body to handle offsets, liberal FDI and licensing policies, and a better banking provision.

• Laxman Kumar Behera
• March 2009
• Strategic Analysis

What does it take to be ‘a vibrant industry’ or more specifically ‘vibrant defence industry’? Broadly, it would demand that the industry should be innovative in terms of processes and products, its base and structure should have large dimensions horizontally, vertically, and technologically to be responsive enough to keep pace with the changing strategic expectations of the nation. Defence exports and imports should be a matter of deliberate political or commercial policy choices and not a result of security compulsions.

• N. Neihsial
• October 08, 2008
• IDSA Comments

The Ministry of Defence (MoD) recently issued a new set of rules for the procurement of arms, ammunition and other defence related products and services. The rule book, known as Defence Procurement Procedure 2008 (DPP 2008), has revised, among others, the offset policy that was first promulgated in 2005 and subsequently revised in 2006. The revised offset policy which retains the earlier minimum 30 per cent offset requirements in defence imports of Rs. 300 crore or more has added a provision of offset banking, besides enlisting a number of categories of defence products.

• Laxman Kumar Behera
• August 19, 2008
• IDSA Comments

India opened up its defence industry to the private sector in May 2001, in a move to enhance the country’s ‘defence preparedness’. To give further impetus to this policy, the Ministry of Defence (MoD) came out with new policy measure related to the concepts of private Industry Leaders [or Raksha Udyog Ratnas (RURs)] “Make” procedure, and defence offsets, in its 2006 Defence Procurement Procedure (DPP). With these policy initiatives, the government’s focus seems to have shifted towards the private sector as far as achieving its long-cherished goal of ‘self-reliance’ is concerned.

• Laxman Kumar Behera
• January 08, 2008
• IDSA Comments

• Laxman Kumar Behera
• 2016
• Book