India Rules out Single Vendor for Defence Products, Offsets Mandatory
Ruling out to go ahead with a single vendor for its defence products if the offsets clause was not agreed to, India has said that it will look for a new source to acquire them in such a scenario, reported PTI.
Government also said that ‘stringent’ penalties are being considered against vendors, who go back on meeting the offsets obligations, which mandated that the seller plough back 30 per cent to 50 per cent of defence deals that are worth over Rs 300 crore, said report.
“In a single vendor situation, if he does not agree to offsets, then we will look for another vendor,” Defence production secretary RK Singh was quoted as saying in a FICCI-organised seminar on Defence Offsets in New Delhi.
Referring to the Defence Procurement Procedure that Indian brought out making it mandatory for foreign vendors to sign an offsets clause in defence deals, he was quoted as saying: “We feel that the penalties are not stringent enough to dissuade vendors from reneging on offsets contracts.”
Singh said that deals that would bring in more than Rs 1,200 crore in offset back into Indian had already been made ‘as enabler of capacity’ to domestic industries, said report.
Another Rs 49,000 crore worth of offsets were in the offing under deals that would come through in the next few years, he said, according to report.
With regard to demands from industries to expand the scope of offsets to civilian areas too under defence contracts, the Secretary said the offsets obligations would remain in the defence sector only and would not be extended to civilian sectors.
