Indian Offset Policy Leads to Israeli Contract

by: Matthew Potter
December 1, 2008

Category: Astra Microwave, Contract Awards, ELTA Systems, India, Israel, IT, Military Aviation, production program | RSS 2.0

Israeli company ELTA Systems placed a contract with Astra Microwave worth about $11 M for components. This is due to the offset provisions in Indian law for foreign firms winning contracts. MarketWatch.com has the press release. Israeli companies won a major contract to provide airborne radar and surveillance aircraft from India recently and this award may be an offset for that contract.

The offset policy requiring a 30% investment in Indian companies is considered harsh by many contractors. Bell Helicopter recently cancelled participation in a contract for new aircraft for that very reason. One can understand the reason for the offset clauses, but there needs to be a balance struck such that they don’t drive away competitors.

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