Q. Consider the following statements regarding defence offset mechanism:
1.One of its intended objectives is to partially compensate for a significant outflow of a buyer country’s resources.
2.Under this mechanism a buyer is mandated to produce or manufacture weapons tech domestically in India.
Which of the above statements is/are correct?
- Statement 1 is correct: Under defence offset policy mechanism transfer of technology is one of its objectives
- Statement 2 is incorrect: There is no such obligation on a buyer.
The Comptroller and Auditor General (CAG), in a report, defined offsets as a “mechanism generally established with the triple objectives of:
- partially compensating for a significant outflow of a buyer country’s resources in a large purchase of foreign goods
- facilitating induction of technology and
- adding capacities and capabilities of domestic industry