Committee of Secretaries to meet soon on national offset policy

NEW DELHI: The Committee of Secretaries will meet soon to finalise the national offset policy, which proposes that foreign firms selling goods worth over Rs 300 crore to the government or PSUs will have to source part of their supplies from domestic manufacturers.

Headed by the Cabinet Secretary, the CoS would meet senior officials of departments including commerce, industry and telecom to finalise the policy.

According to the draft policy prepared by the Commerce Ministry, minimum value of the offsets obligation would be 30 per cent of the estimated cost of the import, meaning the company will have to procure this percentage from local players to boost domestic manufacturing.

"The draft policy was once discussed by the CoS. They have suggested few changes. The Cos would soon meet again to finalise the policy after that it would seek cabinet's approval on that," said a source.

The policy aims at boosting manufacturing sector growth. It will also help attract investments; acquisition of new technology, raw material and assets; improve balance of payment; increase R&D capacity and enhance exports.

Sources said the policy will be applicable to procurement by central government and state-run firms.

Sectors covered under the NOP include civil aerospace, power, fertiliser, railways and other transportation, ports and shipyards, mining, medical equipment, medicine and telecom.

However, sectors including defence, atomic energy and space will not be covered under the policy. Defence sector has a separate policy, while atomic energy and space would pursue offsets in their contracts independently.