India expects $10 billion reveune from offsets

NEW DELHI: Estimating an infusion of a staggering $10 billion as accruals from offsets in defence contracts in the next five years, Defence Minister Pranab Mukherjee has asked public sector defence undertakings to pull up their socks to harness the projected bounty.

The new offset policy announced by the government a year ago makes it mandatory for foreign companies to invest 30 per cent of the contract amount in India for procurement valued at Rs 300 crore or more.

Telling the defence PSUs that the first priority through offsets would be investment in defence-related industries, Mukherjee asked them to put their acts together to take full advantage of the benefits.

He told the Chief Executives of the defence PSUs at a series of meetings that they should draw up elaborate plans for transfer of frontline weapons technology doors for which the offsets would open.

The Defence Minister's comments assume significance in the wake of reports that defence PSUs are still grappling to know the dimensions of the offset policy and struggling to prepare plans to harness the anticipated windfall as most of these units need modernisation.

Mukherjee reviewed the performance and preparadness of various defence PSU's in this task. Last week, he had held discussions with officials of the frontline defence PSUs like Bharat Electronic limited and Mazagoan Docks Limited and today he reviewed the performance of missile makers Bharat Dynamics and Garden Reach shipbuilders and Engineers limited.