New Delhi: The Defence Ministry on Monday announced key changes in its acquisition policy, with the government now allowing procurement of military equipment on lease by deciding not to have an offset clause in three types of deals - government-to-government, inter-government and single vendor defence deals.
The decision was part of the country's new policy for defence acquisitions, which was approved by the defence acquisition council (DAC), headed by Defence Minister Rajnath Singh.
Apurva Chandra, Special Secretary and Director General (Acquisition) said, "We have made changes in offset guidelines. From now on, there would be no offset clause in government-to-government, inter-government and single vendor defence deals."
While speaking after the unveiling of new Defence Acquisition Procedure (DAP) 2020 in New Delhi, Chandra said that in other deals there would be offset policy. He said that as per revision in offset guidelines the preference would be given to the manufacturing of complete defence products over components and various multipliers have been added to give incentivisation in the discharge of offsets.
On September 23, India's federal auditor pulled up Rafale-maker Dassault and its weapons producer for not fulfilling their offset commitment to transfer technology to India as part of the 2016 contract for 36 combat jets.
The country's financial watchdog Comptroller and Auditor General (CAG) in an audit report on Management of Defence Offsets tabled in Parliament flagged that foreign vendors made various offset commitments to qualify for the main supply contract but later were not earnest about fulfilling these commitments.
The report stated, "..in the offset contract relating to 36 Medium Multi-Role Combat Aircraft (MMRCA), the vendors M/s Dassault Aviation and M/s MBDA initially proposed (September 2015) to discharge 30 per cent of their offset obligation by offering high technology to DRDO."
DRDO wanted to obtain Technical Assistance for the indigenous development of engine (Kaveri) for the Light Combat Aircraft.
READ: Delhi Police to seek advocates' help to file charge sheet