Relaxation of Offset Clause for Defence Procurement

The offset clauses shall apply to all Capital Acquisitions categorized as Buy (Global) or Buy and Make with Transfer of Technology where the estimated cost of acquisition is INR 300 crore or more. 30% of estimated cost of the acquisition in 'Buy (Global)' category acquisitions and 30% of the foreign exchange component in 'Buy and Make with ToT' category acquisitions will be the required value of the offset obligations. However, the Defence Acquisition Council (DAC) may, prescribe varying offset obligations above 30% or waive the offset obligations in special cases.

The key objective of the Defence Offset Policy is to leverage capital acquisitions to develop Indian defence industry by (i) fostering development of internationally competitive enterprises, (ii) augmenting capacity for Research, Design and Development related to defence products and services and (iii) encouraging development of synergistic sector like civil aerospace and internal security.

The necessary changes in the offset guidelines are made time to time based on the requirements and difficulties faced in the implementation of the policy.

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