Foreign military equipment suppliers who get military contracts in India have defaulted on “offset obligation” to the tune of $2.24 billion (Rs 16,650 crore). This is the cumulative pendency in the last five years for 21 contracts, the Ministry of Defence informed the Rajya Sabha in a written reply on Monday.
Offsets are an obligation by foreign companies to boost India’s domestic defence industry if India is buying defence equipment from it. Since defence contracts are costly, the government wants part of that money either to benefit the Indian industry, or to allow the country to gain in terms of technology.
