Lok Sabha Question No. 2299 (UNSTARRED), answered on 2016-05-06
Subject: Offset Obligations for Defence Contracts
Ministry: DEFENCE
Asked by: KAUSHALENDRA KUMAR, (SMT.) RATNA DE(NAG), KAMLESH  PASWAN

## GOVERNMENT OF INDIA MINISTRY OF DEFENCE DEPARTMENT OF DEFENCE PRODUCTION

## LOK  SABHA UNSTARRED QUESTION NO.2299

TO BE ANSWERED ON THE 6 TH  MAY, 2016

## OFFSET OBLIGATIONS FOR DEFENCE CONTRACTS

2299.  SHRI KAUSHALENDRA KUMAR: DR. RATNA DE (NAG): SHRI KAMESH PASWAN:

Will the Minister of DEFENCE j{kk ea=h be pleased to state:

- (a) the details of offset obligations for the Original Equipment Manufacturers (OEMs) in  respect  of  all  defence  contracts  signed  by  the  Government  since  introduction  of  the offset policy along with the details of defence contracts currently under finalization;
- (b) the details of offset credits fulfilled against the total obligations in respect of each of defence contracts signed since inception of said policy;
- (c) whether any extension was granted to OEMs for their offset obligations;
- (d) if  so,  the  details  thereof  along  with  the  penalty,  if  any,  charged  for  delay  in discharging offset obligations; and
- (e) the total offset obligations anticipated for the period 2017-2026 along with the list of  Indian  companies  likely to  be benefited  from these contracts and the  value of  work executed by each of the Indian company?

## A    N    S    W    E    R

MINISTER OF STATE IN THE MINISTRY OF DEFENCE

(RAO INDERJIT SINGH)

j{kk jkT; ea=h

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- (a) Since introduction of offset guidelines, 29 offset contracts (19-Indian Air  Force,  7-Indian  Navy  and  3-Indian  Army)  have  been  signed.    The  total offset  obligations  work  out  to  BUSD  6.13  approx.  (contracts  with  different denominations converted to USD) and are to be discharged by 2022.  Details of  offset  obligations  for  contracts  under  finalization  shall  only  be  known once the contracts are signed.

- (b) The  offset  obligations  to  be  discharged  by  31 st December  2015  in respect of defence contracts signed so far amounts to BUSD 2.23 approx. Against which the vendors have reported discharge claims worth BUSD 1.78 approx. (subject to audit) through their quarterly reports.
- (c) Offset  contracts  are  co-terminus  with  the  main  contract  and  are extended if main contracts are extended.
- (e) The offset obligations  arising  out of  contracts  under finalisation  and Indian  companies  likely  to  be  benefited  shall  only  be  known  once  the contracts are signed and implemented in totality.

| (d)   | (i)   | Low Level Transportable Radar (LLTR)   | :   | Since main contract extended.                                                                               |
|-------|-------|----------------------------------------|-----|-------------------------------------------------------------------------------------------------------------|
|       | (ii)  | Fleet Tanker                           | :   | To facilitate implementation of outstanding offset obligations. Penalty of Euro 2.07 million was recovered. |
|       | (iii) | HAROP-UAV                              | :   | To facilitate implementation of outstanding offset obligations. Penalty of 80,500 USD was recovered.        |

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