Since the introduction of the offset clause in India’s Defence Procurement Procedures, offset contracts worth nearly $ 3.3 billion have been concluded so far and about $ 10 billion worth of offset contracts are in the pipeline.

The Indian Minister for Heavy Industries and Public Enterprises, Praful Patel met with the visiting Italian Minister for Economic Development, Paolo Romani and discussed various issues relating to investments in heavy industries, particularly the automobile sector, trade in equipment, machinery and engineering goods and prospects for the Indian public sector, BHEL’s investment in reconstruction of old thermal power plants in Italy, supplying of solar cells and modules to Italian integrators of Solar Power System and also setting up of small Solar Power Systems in association with local partners.

The Indian Minister of State for Defence Dr MM Pallam Raju referred to the tremendous potential for India-Italy defence cooperation while addressing a roundtable on ‘Indian-Italian Defence Cooperation: Opportunities for Partnership and Co-Development’ here on Tuesday. He said: “Since the introduction of the offset clause in our Defence Procurement Procedures, offset contracts worth nearly Rs.15,000 crore (nearly $ 3.3 billion) have been concluded so far and, I am told, that the total value of the offset contracts which are in the pipeline is estimated to be over Rs.41,000 crore (nearly $10 billion)”.

Dr Raju said : “Many Indian defence industries both in the public and private sector are having business interaction and cooperation with various Italian defence companies under FINMECCANICA and FINCANTIERI Groups. There is tremendous potential for enhancing the defence industry cooperation between the two sides, particularly in the context of defence offset policy, the scope of which has recently been increased to include ‘Civil Aviation’ and ‘Internal Security’ and ‘Training’ within the ambit of defence products and services. This will give foreign OEMs wider range of opportunities for meeting their offset obligations.”

He said that there were huge opportunities available for defence industrial collaboration with India. He invited both domestic and foreign companies to forge new alliances and partnerships in the form of joint ventures for co-development and co-production in the defence sector.

“Our Defence Procurement Procedure is also being subjected to periodic review by the Government. The recent introduction of ‘Buy and Make (Indian)’ category in the defence acquisition process has been designed to enhance participation by the Indian Industry for meeting our requirements for state-of-the-art defence systems and platforms by getting into tie-ups with technology providers through mechanism of technology transfer and joint ventures,” Dr Raju said.

The Indian Minister said that the government had also laid stress on building on a strong indigenous industry base. “Recently, we have announced a Defence Production Policy which lays greater emphasis on self-reliance in defence. The Policy seeks to build up a strong indigenous industry base by proactively encouraging larger involvement of the Indian private sector. The policy also seeks to create an eco-system conducive for a private industry, particularly the Small and Medium Enterprises to play an active role in this expansion,” he said.

The Italian Minister for Economic Development Paolo Romani and the Italian Ambassador to India Giacomo Sanfelice di Monteforte also addressed the roundtable.

The two countries have signed an MoU on defence cooperation in November 1994, which was renewed in 2003. The eighth meeting of the India-Italy Joint Defence Committee was held in New Delhi in January last year.