Don’t be chary of offset clause, aviation majors told

Berlin: India has asked aviation majors not to be chary of the hefty domestic sourcing requirement (offset) for mega defence tenders but cautioned them of the need to play by the rules.
Aviation companies taking part in multi-billion dollar tenders have been complaining in private about the hefty 50 per cent offset clause. They have also been taking shortcuts in securing orders that prompted the Defence Ministry to recently cancel a tender for 200 helicopters.
Defence Minister A.K. Antony said the offset clause in defence purchases was meant to be a “bridge” to help Indian companies learn from the expertise of their vastly experienced foreign counterparts.
The Defence Minister is here to jointly inaugurate the Berlin air show with German Chancellor Angela Merkel where India is the partner country for the first time in the exposition’s 99-year history. He is leading a delegation comprising Indian Air Force (IAF) Chief Air Chief Marshal Homi Major, Defence Secretary Vijay Singh and Director General (Acquisitions) S.K. Sharma.
Mr. Antony was speaking at a reception in his honour with the IAF band playing in the backdrop and his German counterpart Franz Josef Jung and other senior officials in attendance. While there were tremendous opportunities in the civil and military aviation sectors, procurement policies have been streamlined and were transparent.
"India has placed record orders for planes with major global manufacturers to meet its growing demand.
At the same time, there is a renewed thrust on modernisation of aviation infrastructure, including airports, navigation and surveillance systems to keep pace with this fast expanding traffic. India also seeks to encourage active indigenisation in defence production as well as greater investment in research and development", Antony said.
28/05/08 Sandeep Dikshit/The Hindu

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Categories: Berlin air show 2008