Indian MoD criticised for 'weak' monitoring of offset programmes

India's Ministry of Defence (MoD) has been criticised by the country's Comptroller and Auditor General (CAG) for its "weak" monitoring of defence offset contracts.

In a report published on 30 November - one day after it was submitted to the Indian parliament - the CAG said the offset policy had secured 16 defence offset contracts valued at INR184.4 billion (USD3.3 billion) between 2007 and 2011.

However, it said that five of these deals were "not in consonance with the offset provisions" outlined in the MoD's defence procurement procedure because "ready-built equipment without any value addition through the Indian offset partners [was] accepted as offsets".

The CAG added: "This was largely due to [the] varying interpretation of various authorities about the legitimacy or otherwise of the offsets being offered. The [Indian offset partners] selected for offsets in some cases were not valid [and] the monitoring mechanism for implementation of offset contracts was weak."

The system for monitoring defence offsets in India has centred on prime contractors' submissions of quarterly reports to the MoD's offset monitoring cell (OMC), which was established in 2010.