Defence offset proposal: Private companies to respond by Tuesday

The ministry of defence issued the policy last month

By Tuesday, defence production stakeholders must respond to new draft proposals for the defence offsets policy, which the ministry of defence (MoD) issued last month.

The defence offsets policy, which the Kelkar Committee first proposed in 2005 and which was formalised that year, binds foreign original equipment manufacturers (OEMs) that win Indian contracts to plough back money into Indian defence industry. The Defence Procurement Procedure of 2005 (DPP-2005) required all OEMs winning defence contracts worth over Rs 300 crore to invest at least 30 per cent of the contract value into "direct offsets”, i.e. into production in India related to