Thursday, June 9 2005 19:57 Hrs (IST) - World Time -

New Delhi: Government today (June 9, 2005) made it mandatory for all major foreign armament companies winning contracts worth more than Rs 300 crores to necessarily invest thirty per cent of the amount in the country as direct offsets.

This is one major change carried out in the Defence Capital Procurement Procedure manual released by Defence Minister Pranab Mukherjee in New Delhi.

Under the new procedure, the foreign arms major will also have to sign an integrity pact to ensure that no "unfair and unethical" means were employed in winning the deals.

In order to come over the recent trends in getting into single vendor situations specially in major platforms and systems acquisitions, the Government in the new revised manual has also broad-based the qualitative requirements and inserted a standard contract document to make procurement speedy.

Elaborating on the direct offsets, Mukherjee said, "We want to leverage our high purchasing power to help the domestic Defence industry."

While pointing out that massive armament deals like purchase of Six Scorpene Submarines under technology transfer from France had not yet been fully finalised, the Defence Minister asserted that this year's capital outlay expenditure of more than Rs 34,000 crores would be fully utilised.

"We may have to ask for supplementary grants under this head as we want to speed up modernisation drive," Mukherjee said.