Article Posted on : - Jan 11, 2011

HYDERABAD (PTI): The Indian defence equipment manufacturing industry is currently engaged in talks at various stages with overseas firms for contracts worth more than $8 billion under the offset clause, Union Minister of State for Defence, M M Pallam Raju has said.

"Projects worth Rs 4,818 crore are at the Contract Negotiation Committee (CNC) stage and others worth Rs 31,839 crore are at initial stages like Request For Proposal (RPF) and Technical Evaluation Committee (TEC)," he said.

The offset clause in the newly-designed Defence Procurement Policy (DPP) which came into being from January 1, 2011 mandates overseas firms securing Indian defence contracts to outsource 30 per cent of the deal to Indian enterprises (both private and public) as offset works.

"The Offset contracts are likely to be more than Rs 10,000 crore in the 11th Plan. More than 35 Indian companies both in public and private sector would be involved in getting the offset benefits. In addition to that Rs 4,818 crore are at CNC stage and Rs 31,839 crore are at Technical Oversight and Evaluation Committee (TOEC), TEC and RFP stages," Raju said.

The Minister was giving a key note address at a two-day seminar on 'Building Capacity through Self-Reliance in Defence' at the Indian School of Business here.

He said as many as 12 Offset contracts valuing Rs 9,943 crore have already been signed, of which contracts worth Rs 6,464 crore were signed by private sector and Rs 3,430 crore by Defence PSUs and Ordnance Factories (OFs).

The Minister said DPSUs and OFs have been advised to invest significantly in R&D efforts.

Five multi-disciplinary Indigenisation Committees have been set up in the department of defence production for the sectors - Land, Navy, Air Missile and electronics to promote indigenisation in these fields.

"The DPP relating to ship building has also been revised with the aim to encourage participation of private ship building industry in India in defence contracts and promote indigenisation in warship construction," Raju said.