Govt mulling opening up more sectors to global arms vendors

The government is examining opening up more sectors for global arms vendors to fulfill their offset obligations under the defence procurement policy, Defence Minister A K Antony said on Wednesday.

Updated: Feb 10, 2011, 00:27 AM IST

Bangalore: The government is examining
opening up more sectors for global arms vendors to fulfill
their offset obligations under the defence procurement policy,
Defence Minister A K Antony said on Wednesday.

Addressing a press conference here, he said the Defence
Ministry is also considering a proposal to allow tranfer of
technology to be used as offsets by the foreign suppliers
bagging defence deals worth over Rs 300 crore under the
clause.
The announcement comes after the Defence Ministry
allowed investments in civilian aerospace and internal
security sectors by global vendors under the new defence
procurement policy released on January 6.

"It is expanded to three sectors now but we feel that
there is scope for some more sectors. There is a proposal for
transfer of most modern technology as offsets. It must be also
be included," Antony said.

He was asked if the government would accept transfer of
technology as offsets under its procurement policy.

The offset clause mandates reinvestment of at least 30
per cent of the worth of deals above Rs 300 crore into Indian
defence, aerospace and internal security sectors.

However, in big ticket deals such as the 126 M-MRCA
procurement, it was pegged at 50 per cent.

Antony said the Defence Ministry has appointed a
committee under the Director General, Acquisitions, to hold
discussions in this regard with all stakeholders, including
the DRDO, the three defence services and the industry and a
final decision in this regard would be taken by the Defence
Acquisition Council (DAC).
He said offsets were a requirement but it should not be a
stumbling block in procuring modern weapon systems for the
armed forces.

Asked if the changes made in the policy would be
applicable to the ongoing procurement procedures also, the
Minister said "whether it is the defence procurement procedure
or some other policy, we will implement the changes only in
prospective as implementing them in retrospective may
benefit a few manufacturers."

The Defence Minister said the offset policy was an
evolving one and would be changed "whenever" there a need to
do so.

Asked about his comment on India receiving low-level
defence technology as imports, Antony said no country would
transfer A-level technology to any country and India will have
to develop state-of-the-art weapon systems on its own.

PTI