gfiles magazine

May 10, 2012

Targeting big bucks

Targeting big bucks
ministers eye defence offsets
Politicians seem to have a knack for smelling out the moolah! Seeing the big bucks in the defence offsets programme, several ministers have joined retired military and air force officers in strengthening the offset policy, so to speak. Gfiles has come to know that the scions of various interested defence officers flew to Russia, France, Israel and the USA to discuss participation modalities with companies who have bagged orders or are likely to corner big deals. Under its defence procurement procedure, India imposes counter-trade obligations on original equipment manufacturers (OEMs) awarded defence contracts worth more than Rs 300 crore to transfer critical technologies and production of components to India. The revised (offsets) policy recognises transfer of technology (ToT) as eligible for discharge of offset obligations. The policy says, “The ToT should be provided without licence fee and there should be no restriction on domestic production, sale or export. The offset credit for ToT shall be of 10% of the value of buy-back by the OEM during the period of contract, to the extent of value addition in India.” So every arms supplier has to transfer technology and for that he needs local collaborators. Who better than politicians and retired army personnel! It also suits the supplier as he can make inroads into the Defence Ministry through retired officials and into the government through ministers. And, under the guise of the offset policy, it’s all legal – and big money. g

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