A new offset rule from the Indian MoD states that any foreign company winning a contract of over $60 million must re-invest at least 30% of the contracts value back into the Indian economy.
The offset, presented in a memo from the defence ministry, is designed to encourage technology transfer to the Indian defence sector.
The new ruling will prevent companies from counting research and design, software testing and training as part of their offset requirement, as has previously been the case.
Step-by-step, the Indian MoD is making it that little bit more difficult for foreign firms to avoid the pitfalls of its acquisition process and squeeze out investment where possible. Its a good job big-ticket contracts are so prevalent in India, meaning firms can still make significant margins on deals in the region.
Indian offset rules rejigged by Defence IQ Press
The offset, presented in a memo from the defence ministry, is designed to encourage technology transfer to the Indian defence sector.
The new ruling will prevent companies from counting research and design, software testing and training as part of their offset requirement, as has previously been the case.
Step-by-step, the Indian MoD is making it that little bit more difficult for foreign firms to avoid the pitfalls of its acquisition process and squeeze out investment where possible. Its a good job big-ticket contracts are so prevalent in India, meaning firms can still make significant margins on deals in the region.
Indian offset rules rejigged by Defence IQ Press
