Shortfall in implementation of Defence Offsets; India imposes penalties in 12 cases

Defence ministry figures on the offset obligations on 25 contracts signed since 2008 show a shortfall in implementation in 13. India has imposed penalties in 12 cases. As per the Ministry Data, India has imposed a cumulative total penalty of about $35 million on 11 global companies comprising of four from Israel, two each from Italy and Russia, and one each from France, Switzerland and the U.S. Israel’s Elbit Systems Ltd. is the only company that completed all its offset obligations for its contract. Out of the approximately $5 billion offset obligations, only about $2 billion have been accounted for by the global companies. Of these, only about $250 million worth of offsets has been approved by the Ministry of Defence as implemented. There is another $15 billion of offset that is likely to accrue in the next 15 years which means an average of $1 billion offset every year.


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