illusion8
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Carter has come with at least five proposals for co-development or co-production of US-origin military equipment in India, which, admittedly, have the potential to take Indo-US defense trade to a new level. These include development and production partnerships for:
But in return, the US is looking at the Indian defense ministry to make it easier for US companies to do business with it. One of the important items on the wishlist of US vendors is flexibility on offset structuring. India typically requires international defense companies to plow back at least 30 percent of the value of any orders they receive that are worth INR 300 crore (USD 50 million) or more into Indian industry.
Flexibility on offsets
These companies would like some leeway in being able to add, remove, change or replace Indian offset partners or restructure the values of offset contracts depending on changes in contracts, as and when, new, better candidate companies for offset partnerships emerge in India, or if existing partners no longer offer the value envisaged earlier. This, they claim, would allow them to deliver on their offset obligations more efficiently and tailor them to the best and dynamic interests of Indian defense industry.
Limiting liability after delivery
US companies feel that since neither the Indian Defense Procurement Procedure (DPP) nor the Defense Procurement Manual (DPM) talks about any specific formulae or guidelines for imposing the burden of risk on vendors, their assumption of liability at the time of selection as preferred vendors, for possible problems after future delivery, may end up uncertain and arbitrary.
US industry says that liabilities need to be balanced to distribute risk between the vendor and the buyer.
Delays
Finally, Ash Carter would like the defense ministry to speed up decision-making, especially in cases where the Letters of Offer and Acceptance (LOA) have been approved. US companies claim they find it difficult to maintain the validity of their offers indefinitely, citing rising costs and uncertainty over the life of their assembly lines.
What Ashton Carter wants from India | StratPost
- Raytheon and Lockheed Martin-built Javelin Anti Tank Guided Missile (ATGM)
- Sikorsky and Lockheed Martin-manufactured MH-60 Romeo helicopter
- BAE Systems Mk 45 127 mm naval gun
But in return, the US is looking at the Indian defense ministry to make it easier for US companies to do business with it. One of the important items on the wishlist of US vendors is flexibility on offset structuring. India typically requires international defense companies to plow back at least 30 percent of the value of any orders they receive that are worth INR 300 crore (USD 50 million) or more into Indian industry.
Flexibility on offsets
These companies would like some leeway in being able to add, remove, change or replace Indian offset partners or restructure the values of offset contracts depending on changes in contracts, as and when, new, better candidate companies for offset partnerships emerge in India, or if existing partners no longer offer the value envisaged earlier. This, they claim, would allow them to deliver on their offset obligations more efficiently and tailor them to the best and dynamic interests of Indian defense industry.
Limiting liability after delivery
US companies feel that since neither the Indian Defense Procurement Procedure (DPP) nor the Defense Procurement Manual (DPM) talks about any specific formulae or guidelines for imposing the burden of risk on vendors, their assumption of liability at the time of selection as preferred vendors, for possible problems after future delivery, may end up uncertain and arbitrary.
US industry says that liabilities need to be balanced to distribute risk between the vendor and the buyer.
Delays
Finally, Ash Carter would like the defense ministry to speed up decision-making, especially in cases where the Letters of Offer and Acceptance (LOA) have been approved. US companies claim they find it difficult to maintain the validity of their offers indefinitely, citing rising costs and uncertainty over the life of their assembly lines.
What Ashton Carter wants from India | StratPost
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