Decoding The Procurement Process
Businessworld|April 14, 2018

Clarity about the intricacies of the offset guidelines could benefit both buyers and sellers.

Lt Gen V.K. Saxena (Retd)
Decoding The Procurement Process

AN OFFSET BY DEFINITION IS A PROVISION in an import agreement (say, a defence procurement deal) between the seller (an original equipment manufacturer/OEM) and the buyer, wherein the former agrees to undertake activities that satisfy the “second objective” of the buyer.

While the primary objective of the buyer is to procure the goods and services pertaining to the ‘core transaction’, the second objective is seen as an “additional benefit” which the buyer ‘extracts’ from the seller for awarding him the ‘core transaction contract’. In other words, the buyer agrees to service the second objective for winning the main contract.

In typical defence procurement deals, offsets may take different forms. Some of these may include supply of additional goods and services in addition to the main equipment at no extra cost, supply of simulators, training equipment, packages for technical and on-the-job training, transfer of certain technology, setting up infrastructure for overhaul and refurbishment, provision of additional spare packages/ life-time guarantee of spares, buy-back clause/or offer for export to seller’s clients for the output produced by the buyer (where co-development and co-production is involved), etc.

Revised Guidelines

In 2012, the Ministry of Defence (MoD) constituted a study group under Director General Acquisition (DGA) for carrying out a comprehensive revision of the offset guidelines. The report, duly approved by the MoD, found a place in DPP 2013. (The author has had the honour of being a Service representative on the said study group.)

هذه القصة مأخوذة من طبعة April 14, 2018 من Businessworld.

ابدأ النسخة التجريبية المجانية من Magzter GOLD لمدة 7 أيام للوصول إلى آلاف القصص المتميزة المنسقة وأكثر من 9,000 مجلة وصحيفة.

هذه القصة مأخوذة من طبعة April 14, 2018 من Businessworld.

ابدأ النسخة التجريبية المجانية من Magzter GOLD لمدة 7 أيام للوصول إلى آلاف القصص المتميزة المنسقة وأكثر من 9,000 مجلة وصحيفة.

المزيد من القصص من BUSINESSWORLD مشاهدة الكل
Gauging Trumponomics For India
BW Businessworld

Gauging Trumponomics For India

Despite some shortto mediumterm headwinds in trade and immigration, the broader Indo-US vision of counterbalancing China’s influence is expected to ensure continued cooperation under Trump 2.0

time-read
2 mins  |
November 16, 2024
Reflections on Consciousness and Creation
BW Businessworld

Reflections on Consciousness and Creation

Indian-American DEEPAK CHOPRA on the nature of the universe, the digital fabric of existence, and the power of a conscious mind

time-read
2 mins  |
November 16, 2024
MORE TAKE TO DRIVING IN STYLE
BW Businessworld

MORE TAKE TO DRIVING IN STYLE

High-end luxury vehicles are no longer part of a niche market, but a rapidly expanding segment of automobile sales, driven by changing consumer preferences, rising disposable incomes and better infrastructure

time-read
4 mins  |
November 16, 2024
India's Growing Affinity for Swiss Watches: A Luxury on the Rise
BW Businessworld

India's Growing Affinity for Swiss Watches: A Luxury on the Rise

NDIA'S ROBUST ECONOMIC growth, projected to exceed 6 per cent in 2024 and 2025, is fostering a rising demand for aspirational products. As disposable incomes increase, particularly among the expanding middle class, luxury goods such as Swiss-made watches are gaining popularity.

time-read
2 mins  |
November 16, 2024
An ENRiching Outlook
BW Businessworld

An ENRiching Outlook

KPMG's latest report shows energy CEOs being optimistic about the sector's outlook. ANISH DE, Global Head, ENRC, KPMG speaks to BW Businessworld's Arjun Yadav on what's driving this confidence

time-read
2 mins  |
November 16, 2024
Paving the Path to a Sustainable Future
BW Businessworld

Paving the Path to a Sustainable Future

Salesforce's ESG journey has made an impact beyond the company. SUNYA NORMAN, SVP of ESG Strategy and Engagement at Salesforce, shares more on how the tech giant integrates sustainability into its core operations, supporting global goals while empowering employees

time-read
2 mins  |
November 16, 2024
LEADERSHIP TRANSITION AT XIAOMI INDIA
BW Businessworld

LEADERSHIP TRANSITION AT XIAOMI INDIA

Xiaomi India is experiencing a leadership evolution, beginning with Muralikrishnan B's departure as President by the end of 2024. This change underscores Xiaomi's shift towards nurturing local talent amidst dynamic global shifts. The story tracks key transitions from Manu Kumar Jain's leadership to Muralikrishnan B's impactful tenure, along with recent strategic hires, highlighting Xiaomi's alignment towards market adaptability and consumer focus

time-read
3 mins  |
November 16, 2024
WEAVING SUSTAINABILITY
BW Businessworld

WEAVING SUSTAINABILITY

Once a modest home textile manufacturer, Jindal Worldwide has evolved into a vertically integrated textile powerhouse, spanning critical segments of the yarn and fabric value chain

time-read
1 min  |
November 16, 2024
FORCE FOR GOOD
BW Businessworld

FORCE FOR GOOD

FY24 saw capacity expansions for Century Enka in nylon and polyester segments, along with investments in modernisation, renewable energy, and safety initiatives

time-read
1 min  |
November 16, 2024
REIMAGINING TOMORROW
BW Businessworld

REIMAGINING TOMORROW

For V-Guard, tomorrow signifies progress, driven by today's actions, setting the foundation for future growth and value creation for all stakeholders

time-read
1 min  |
November 16, 2024