By Anuraag Chhibber
Although defence offsets, being in the nascent stages are yet evolving, India’s experience so far with offsets has not been very encouraging. The offset policy is neither geared towards delivering optimum results nor is the system of implementation established and robust. Defence offsets come at a cost and empirical studies have shown that the premium in this cost is transferred to the buyer and it still remains unclear as to who benefits from such transactions.
The present offset guidelines suffer from certain key weaknesses including ambiguity in explanation, greater leeway to foreign vendors, little incentive to defence manufacturing and lack of in-house capacity for monitoring/auditing offset programmes.