Defence procurements have started flowing in along with their offsets. The offset benefits for the country look set to reach $12-15 billion over the next 10 years, Defence Minister Manohar Parrikar said here on Thursday.
With purchases coming through, their offsets or plough-backs to domestic industry have normalised. In the last two years, 100 per cent offset obligations were achieved compared to around 60 per cent during the earlier five years.
“The quantum of offsets will increase in the coming years because deals are in the offing.” The purchase of 36 Rafale medium multi-role fighter aircraft that is currently going through cost negotiations will result in offsets that will be 50 per cent of the value of the deal.
“There are still many things that can be done with offsets if you apply them well,” Mr. Parrrikar said, while addressing the seventh annual Strategic Electronics Summit organised by Electronics Industries Association of India (ELCINA).
Starting with the Defence Procurement Policy 2016, many changes are taking place in Defence policies where industry role was important. The government was carefully and practically viewing the policy of banning and penalising certain vendors. The logic was to ensure that projects do not get stalled for many years, he said.
The Minister stressed that Defence public sector units such as Hindustan Aeronautics Ltd., Bharat Electronics Ltd. and Bharat Dynamics Ltd., which manufacture critical products for the Forces, should be lead integrators and make way for industry as supplier of components and systems.
The contribution of small and medium industries to Defence PSUs increased four per cent last year and stood at nine per cent of the total procurement. The target is 15 per cent, he added.
Ajay Kumar, Additional Secretary, Department of Electronics and Information Technology, said Defence policies had triggered a huge surge in electronics hat go into major projects for the Armed Forces.
“After many years, last week, we received the 200th proposal for investment in electronics,” he said.
