12:00 AM, February 17, 2010
Defence offsets policy would be the key driver for the growth and modernisation of the defence industrial base. India's Defence Offsets policy is evolving as per the requirements, keeping in perspective policy considerations and global processes. The industry therefore will evolve in-sync with the overall development leading to progressive policy initiatives coming up in future, announced Mr. MM Pallam Raju, Minister of State for Defence, Government of India. He was speaking at a Seminar on Leveraging Offsets for Naval Self Reliance organised by Confederation of Indian Industry (CII). While speaking at the seminar, the minister acknowledged that the Indian Navy has now graduated to design and building of its own aircrafts. Defining the milestones achieved in offsets domain, Mr. Raju outlined that offsets proposals worth 49,000 Crore are in the pipeline. Given the complexity involved in supervision of offsets, an administration infrastructure to facilitate offsets banking has been put in place. Public sector alone will not be able to absorb huge amount of offsets that are to be generated in future. Offsets therefore provide an opportunity to domestic players to penetrate the sensitive defence industry. The minister further added the government is also planning to take a look at replicating tax benefits extended to exports firms to the domestic players as well. The government of India views combining the skills of public and private sector which will help in achieving higher degree of defence indigenisation. Role played by SMEs has been a testimony of being a backbone of the defence industry, and its role is vital for the self reliance of the industry. Urging the Industry to gear up, the minister earmarked the prospects of 'Buy and Make' (Indian) categories which facilitates Joint Ventures with foreign OEMs, strengthening R&D, technological upgradation amongst others. He also stated that a strong defence industry will help India in leveraging its buying power, expanding technological base, facilitating global tie-ups and joint ventures. This will be in aimed at reducing defence imports and promoting indigenisation. Vice Admiral NN Kumar, AVSM, VSM, Controller of Warship Production and Acquisition, Integrated Headquarters of Ministry of Defence (Navy) said that India is the world's second largest importer of arms pegged at USD 5.6 billion. This amount is likely to grow in future. A strong domestic industrial base can be developed by having three key considerations in place, i.e. willingness of the exporting company to release technology, ability of the recipient to absorb technology and finally to keep pace with the technological advancements. The industry is still exposed to lot of gaps due to inadequate investments. He added that self reliance needs strong development capabilities and dedicated investment of resources.