No offset obligation lapsed in last five years: Govt

The quantum of defence offset obligations for which claims have been submitted is USD 6.85 billion, the government said on Monday. Replying to a question in Rajya Sabha, Minister of State for Defence Ajay Bhatt said no offset obligation has lapsed during the last five years.

Under India's offset policy, the foreign defence entities, for all contracts worth Rs 2000 crore or more, are mandated to spend at least 30 per cent of the total contract value in India through procurement of components, transfer of technologies or setting up of research and development activities.

However, the offsets are not applicable to procurements under 'fast track procedure' and in 'option clause' cases if the same was not envisaged in the original contract.


Further, no offsets are applicable in contracts under intergovernmental agreements.

"The total value of all offset contracts is USD 13.21 billion. The quantum of offset obligations for which claims have been submitted is USD 6.85 billion. The quantum of offset due is 0.12 billion US dollars so far," Bhatt said.

He was asked about the total value of all offset contracts, the quantum of offsets obligations paid so far along with the quantum of offsets dues by defence contractors.

Bhatt said penal action is taken against defaulting vendors as per the relevant provisions of the defence offset guidelines under the applicable defence procurement procedure.

"Assessment of the quality of offsets is not provided as bid evaluation criteria in the defence offsets guidelines under the extant defence procurement procedure," he said.