Offset clause goes for IGAs - The Hindu - 29/09/2020

The Defence Acquisition Procedure (DAP), 2020:

The new Defence Acquisition Procedure (DAP), 2020 has been released. The draft was finalised by a committee headed by the Director General Acquisition, Defence Ministry that was set up in August 2019.

The Defence Ministry has removed the offset clause requirement in Inter-Governmental Agreements (IGA).
From now on there will be no offset clause in government-to-government, single vendor and IGAs.
It also introduces a new category for leasing of military equipment.
Other proposed measures include:
Making after-sales support a part of the capital acquisition contract
Higher indigenous content in acquisitions
Incentives for local material and software and emphasis on product export under offsets.
Leasing has been introduced as a new category for acquisition in addition to the existing ‘Buy’ and ‘Make’ categories.
This would substitute huge initial capital outlays with periodical rental payments.
A new procedure has been included as a new chapter in Defence Acquisition Procedure and structured as an enabling provision for Services to procure essential items through Capital Budget under a simplified procedure in a time-bound manner.

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