“The Indian Defence Industry and the Global OEMs need to work together to discharge the immediate offset obligation of USD 2.4 billion” says Shri Raj Kumar, Secretary Defence Production, Government of India.
No. PR- 139 November 19, 2020 New Delhi “The Indian Defence Industry and the Global OEMs need to work together to discharge the immediate offset obligation of USD 2.4 billion” says Shri Raj Kumar, Secretary Defence Production, Government of India. PHDCCI Defence & HLS Committee organised an Industry Interactive Webinar on “Developing New Indian Offset Partners under Make in India for Atmanirbhar Bharat” today on 19th November 2020. Shri Raj Kumar, Secretary Defence Production, Government of India was the Chief Guest for the Webinar and delivered the Keynote Address on the occasion. Secretary Defence Production, Shri Raj Kumar emphasised on “Atmanirbhar Bharat” and urged all to have a holistic view of defence production in the country. Highlighting the initiatives taken by MoD in providing preferential tenders to only Indian companies for all contracts valued less than 200 Cr as also reservation for MSMEs for all contracts in defence valued less than 200 Cr, he brought out the positive effects on increase in FDI to 74%. The creation of a new category of Buy global, manufacture in India, was indeed to facilitate this FDI and bring it in sync to the FDI policy. He said, it is our endeavour to integrate Indian companies into the global supply chain. Giving out statistics like there were 56 contracts worth USD 13 bn for discharge whereas only USD 3.6 bn worth of claims have been made. While an amount of USD 5.6 bn is due for discharge as on date there is a deficit of USD 2.4 bn worth of discharge which is an opportunity sitting on a platter for the Indian industry. While there are about 170 IOPs (Indian Offset Partners) presently, he encouraged the industry, both domestic and foreign to make use of this opportunity to integrate with OEMs and create mutually beneficial relationships. While the past has been tough, he said, the future is yet to arrive to implement the DAP 2020; in the meantime, he urged the industry to make optimum use of the opportunity at hand. Shri Sanjay Aggarwal, President, PHDCCI welcomed the Secretary Defence Production along with the esteemed Panellists and the delegates. He applauded the new DAP 2020 and the Defence Offset Policy and believe that such a policy will certainly go a long way in ensuring the success of Make in India and Atmanirbhar Bharat in context to indigenous defence manufacturing. It will also help develop a complete defence industry ecosystem in the country, which integrates itself in the global supply chain by entering into JVs or procurement system of the global OEMs. Further the Offsets will also prove as a tool to acquire the latest defence, aerospace and related technologies by the Indian companies Mr M K Gupta, Chair, PHDCCI Defence & HLS Committee gave out the statistics of production of raw materials in the country and sought Government’s intervention for encouraging use of indigenous raw materials in the discharge of offset obligations by the foreign OEMs. Mr. Vikram Sahgal, Co-Chair, PHDCCI Defence & HLS Committee complimented Government of India on an excellent policy especially the encouragement provided to MSMEs under the offset contracts. Mr. William Blair, VP & CEO Lockheed Martin India, while appreciating the progressive policy stated that the synergistic sectors of Civil aviation be included for offset discharge. Dr. S K Jha, CMD, Midhani ensured that the country has capability in terms of supplying the critical and strategic raw materials for the defence and aerospace sector. He spoke about the opportunities for the MSMEs under the DTIS (Defence Testing Infrastructure Scheme) of the Government. Mr. Sanjeev Venketesan, Director, Raytheon, was highly appreciative of the policy and regulatory and urged for a coordination and synergy between the Foreign Military Sales (FMS) and DAP processes. He highlighted the tight timeframes and appreciated early conclusion of approvals. Mr. C P Agarwal, Head-Defence Business, Jindal Stainless Ltd. urged the reinstatement of banking of Offsets and inclusion of indigenous Raw materials in all domestic programs and for offsets.. Dr Subba Rao Pavluri, CMD, Ananth Technologies Ltd. highlighted technological excellence as a growth for the nation and urged tat the strategic sectors of space and civil aviation also be included for discharge of Offsets. With the excellent experience he has with foming JV with Russians he said collaborative arrangements will produce huge dividends. Mr. Anurag Verma, Country Manager, ISP, Boeing India highlighted the number of partners they have which is to the tune of 225 and the high level of sourcing Boeing does to an extent of USD 1 billion each year, often without offsets in mind. A lot can be brought under offsets to reap higher dividends. Col. Ramit Arora, GM (Exports), Solar Industries India Ltd. acknowledged that the Government has done a good thing by looking at Offsets holistically and concentrating on components. The key problem in offsets is of the implementation. Mr. Ananya Mittal, CEO, Arshiya Ltd. highlighted the effective use of Free trade Warehouse Zone(FTWZ) as an effective method of sving on taxes and carrying out integration work for direct supply to the Indian Armed Forces, from a foreign land(FTWZ). He also said that of the three FTWZ in India he owns tow of them, in Mumbai and UP. Mr. Rudra Shriram, Co-Chair, PHDCCI Defence & HLS Committee presented the formal Vote of Thanks concluding the Webinar. This meaningful and timely Webinar was well moderated by Col K V Kuber, Director, Defence & Aerospace, Ernst & Young and Mr. Vivek Seigell, Principal Director, PHDCCI. It was attended by around 150 delegates from the country and abroad. Ernst & Young was the Strategic Partner for the Webinar, which was partnered by Star Wire India Ltd., Micron Instruments, Solar Industries India Ltd. and DCM Shriram Ltd. Ends Media Division PHD Chamber of Commerce and Industry