Offsets multipliers desired in India’s defence policy: American Chamber of Commerce

The American Chamber of Commerce in India (AmCham) is pursuing further evolution of the Indian defence offsets policy. While largely welcoming the Defence Procurement Policy (DPP) 2011, it would like to see offset multipliers and transfer of technology included in the next review of the policy. The DPP 2011 released in January has expanded the scope of offsets to include homeland defense and civil aviation equipment in its list of direct offsets. However, a constant industry demand has been to include offset multipliers, which allow a foreign company to calculate the worth of its technology from the multiplier effect it beings to the Indian industry. Chairman, Defence Equipment Committee of AmCham, Dr Vivek Lall told Defenseworld.net that offsets should be a catalyst to self reliance in defence manufacturing. Dr. Lall who is Vice President Defense, Space and Security, Boeing said his company and other Original Equipment Manufacturers (OEMs) can be partners in the roadmap to self reliance and it would be a win-win for the Indian industry and foreign OEMs. Lall said the structure of the organization which is reviewing and adjudicating the offsets is vital to determining which country’s offsets are successful and which are not. Offsets are meant to grow the local industry and help it to compete on the world stage. He said AmCham was a platform to discuss policy issues and educate member companies from both sides about rules and regulations to be followed in defence equipment manufacturing and sales. AmCham recently did a suppliers’ event in Bangalore to match Indian and American companies in manufacturing capabilities. It was vital that companies know what rules to be followed. For example, there was an American law called the Truth in Negotiations Act (TINA) which required government contractors to submit costs and pricing data and to certify that such data is accurate. Referring to the offsets proposal of Boeing’s bid for the MMRCA fighter tender, Lall said 38 offset partners in India had been identified who would partner with 16 tier 1 suppliers of Boeing. Memorandum of Understanding (MOU) have been inked and it will be an entire industry to industry conglomerate should Boeing’s F/A 18 win the MMRCA race. At Aero India 2011, there will be further dialogue under the AmCham umbrella with the U.S. Commerce Secretary, Gary Locke leading a delegation to India.