The Indian Ministry of Defence (MoD) has clarified procedures related to existing offset banking activity following its controversial decision to remove related provisions in its latest defence offset policy.
The MoD’s Defence Offsets Management Wing (DOMW) confirmed in a notice on 8 October that from the beginning of this month it will accept no new defence offset banking claims and that existing claims would receive a 12-month limit. “No offset banking claims can be made for transactions done on or after 1 October 2020,” said the DOMW notice.
It added that any offset banking claims submitted before that date will be permissible if they are applied within one year of related transactions. “Banking offset claims for which transactions have been completed on or before 30 September 2020 will be processed provided they are applied within one year of completion of transactions and complying with other laid down conditions in the Defence Procurement Procedure (DPP) 2016,” said the notice.
India has clarified its move to end banking provisions in offset projects linked to sales of defence equipment such as MH-60R helicopters (pictured) to the Indian Navy. (US Navy)
The DOMW added that other defence offset claims that are at “different stages of examination” will be processed in line with the provisions of previously issued DPPs. Offset banking credit can be utilised as per the provisions contained in the DPPs issued in 2008, 2011, 2013, and 2016.
India’s new defence offset policy is contained in the Defence Acquisition Procedure 2020, which was issued by the MoD on 28 September. The new policy replaces the DPP 2016.
The new offset policy provides several new clauses – for example, new multipliers – but also removes several provisions that were available in previous guidelines issued through the DPPs.
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