20 % penalty for foreign military vendors not meeting offset obligations
The Ministry of Defence announced a penalty of 20 % to be imposed on foreign military vendors who are ubable to fulfill offsets obligation within the prescribed time frame as part of the Defence Procurement Procedure.
· No cap on penalty for inability to implement offset obligations during the period exceeding the main procurement contract, which can extend to a maximum period of two years.
· Vendors signing deals over Rs 300 crore have to re-invest at least 30 % of the worth of the contract back into Indian defense, civil aerospace and homeland security sector.
· India is expected to sign offset contracts worth over $30 billion in the nexthttp://www.gktoday.in/wp-admin/edit.php five years.