More Teeth For Indian Offsets Agency

As part of the revised offset policies recently announced by the Indian ministry of defense (MoD), a defense offset monitoring wing (DOMW) will replace the existing offset facilitation agency with enhanced powers. The DOMW will effectively monitor the implementation of offsets and hire a private agency for physically auditing the implementation of offsets by foreign arms vendors . A Defence Offset Management Wing (DOMW) has been established under the DDP, which has been assigned the responsibility of offset contract management. The new offset policy allows technology transfers and extended the period of completing offset obligations to two years beyond the period of the main procurement contract. The revised defense offset policy came into effect from 1st August has laid guidelines in which investment in small and medium enterprises can carry extra points in the new offset regime. The offset policy aims to develop the local defence industry. An analysis by the Indian Institute of Defence Studies and Analysis states that there are certain drawbacks in which the policy offers greater scope to foreign vendors, less incentive to defence manufacturing, and lack of in-house capacity for monitoring. Under the offset norms, foreign companies bagging government contracts are required to invest a portion of their earnings back as investments into India. India’s defense offset policy defines objectives that include the development of competitive industries, the need to add R&D and design capabilities and the development of synergistic sectors. The policy now includes coastal security, in addition to internal security.