The national auditor, in its report, said the French firm has so far not made good on its offset obligation to the Defence Research and Development Organisation.
Defence Ministry, which also governs the deal with France for 36 Rafale jets made by Dassault Aviation, has been sharply criticized by the Comptroller and Auditor General of India for its offset policy. The national auditor, in its report, said the French firm has so far not made good on its offset obligation to the Defence Research and Development Organisation.
A certain percentage of the deal value with foreign firms, under the offset policy, should flow into India as foreign direct investment or FDI, which would eventually include technology transfer, local manufacturing of advanced components, and creating jobs, NDTV reported.
“In the offset of four contracts relating to 36 Medium Multi Role Combat Aircraft (MMRCA), the vendors Dassault Aviation and MBDA initially proposed (September 2015) to discharge 30 per cent of their offset obligation by offering high technology to DRDO,” the CAG, in the report tabled in parliament, said. It was referring to the Defence Research and Development Organisation.
“DRDO wanted to obtain technical assistance for indigenous development of engine (Kaveri) for the Light Combat Aircraft. Till date the vendor has not confirmed the transfer of this technology,” the auditor said, adding that the policy of offsets has “not yielded the desired result”.
“The (Defence) Ministry needs to review the policy and its implementation. It needs to identify the constraints faced by the foreign suppliers as well as the Indian industry in leveraging the offsets, and find solutions to overcome these constraints,” the report mentioned.
It will eventually meet its offset obligation, Dassualt aviation has said, which has slowed down in the last few months due to the coronavirus crisis.
India’s deal with France is worth ₹ 58,000 crore which includes 36 Rafale jets, out of which, five of the multirole jets have been inducted into the Indian Air Force.