Defence

US manufacturers are trying to persuade the Indian government to ease proposed new offset requirements that would make it difficult for them to compete for military aircraft procurements including next-generation fighters.

Industry sources say a committee set up by New Delhi to draft a national offset policy is recommending direct offsets worth 30% and technology transfers worth 90% for all future imports, in addition to co-production.

US companies have been lobbying India individually and collectively under the US-India Business Council not to implement the offset policy.

New Delhi plans to implement a new offset policy by year-end, but sources say the defence ministry could ignore it.

Sources say if the proposed offset policy is enforced, small US companies would not be able to do any defence business in India and large companies would have trouble competing against European and Russian manufacturers.

India is planning to hand shortlisted manufacturers a highly anticipated tender for at least 126 new fighters next month.

The US government is preparing to respond with pricing for the Boeing 
F/A-18E/F and Lockheed Martin F-16. New Delhi earlier this year also received preliminary information on the Dassault Mirage 2000, MiG MiG-29 and Saab Gripen. Sources say efforts by the French and UK governments to persuade India to add the Dassault Rafale and Eurofighter Typhoon to the shortlist appear to have been successful.

BRENDAN SOBIE/SINGAPORE