 "Aviation ministry mulls manufacturing policy")
“India provides significant business opportunities to many countries. Based on the passengers and business we provide to them, a bilateral agreement can require (the other party) to pass on the offset to us, so that we grow together…We provide passengers to them, they provide manufacturing assets to us,” civil aviation secretary R N Choubey said at an event in New Delhi on Friday.
An offset clause generally refers to a foreign company investing back a portion of the deal into India. If an airline places a bulk order for aircraft, it would require certain manufacturing or maintenance facilities to be built in the country.
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“Suppose there is a country which places an order for 100 planes and I know a significant part of these planes are because of the business we are providing to it through bilaterals. Then, during negotiation, we might ask the country to give a part of the offset deal to us,” Choubey explained to reporters after the event.
At present, countries sign an air service agreement through which they decide the weekly flights or seats into each other's country, depending on the market requirement. Then, the government distributes the allocated seats to the respective airlines. The government is planning to link these offset benefits in the bilaterals.
"Bilaterals are government to government. We would ask the (other) governments, if you want our bilaterals, can you please require your plane suppliers to place some manufacturing facility in our country?” Choubey added. His ministry is framing an aviation policy, to be issued in a proposal form by the end of this month, minister Ashok Gajapathi Raju said. But, the aviation secretary said, this new idea might not be a part of the draft policy.