Defense: Export Opportunities through Countertrade and Offsets

CII organised an Online Master Class (OMC) on Export Opportunities Through Counter Trade and Offsets on 28 November 2012. Mr TS Viswanath, Principal Advisor, APJ-SLG Law Offices was the faculty in the first part of the OMC and Col (Retd) K V Kuber, Advisor Defence, National Small Industries Corporation Ltd was the faculty in the second part of the OMC. The session detailed the government's initiatives and schemes related to countertrade and defense offsets and the opportunities available to the Indian companies.

Countertrade: A significant volume of international trade is covered by counter trade. A major benefit of countertrade is that it facilitates conservation of foreign currency, which is a prime consideration for cash-strapped nations. Other benefits include increased employment, higher sales, better capacity utilization and ease of entry into challenging markets.

Defence Offsets: The defense procurement outlay alone is to the tune of INR 60, 000 Crores each year and is likely to be INR 70,000 Crores for the FY 2013-14. This is only for capital acquisitions and new purchases. All defense procurements are done centrally by the federal government, through an acquisition process defined in the Defence Procurement procedures (DPP). The DPP also includes a very important aspect of industrial participation, called Offsets. Offsets are mandated in the DPP for all high value procurements from foreign suppliers, thereby generating guaranteed business for the domestic industry. The new offset guidelines include certain transformational aspects such as technology transfers, technology acquisition, FDI in terms of equity and non-equity and many more. They also provide for special incentives for the foreign suppliers when they choose Indian MSMEs as offset partners. A good understanding of the DPP and offset guidelines will help the domestic industry, to optimally use the provisions for generating capability, more business and infusing technology.

This Master Class enabled the participants to understand these concepts as well as how to actively participate in the emerging business opportunities available through Countertrade and Offsets. The Session focused on all of the above aspects and discussed a few important ones in detail.


Mr. Vishwanath is the Principal Adviser with APJ-SLG Law Offices since April 2009. He works closely with government and industry in India on impact of multilateral and bilateral trade agreements and global economic policies for industry.

The core area of work for Mr. Vishwanath is analyzing the impact of regulations and government policies across the globe that impact global trade in agriculture, marine and industrial products.

From 2003 to 2005 he was posted in Geneva, Switzerland as Head- CII Geneva Office to follow the Doha Round of negotiations of the WTO and provide inputs to negotiators on the Indian industry position for the Doha Round.

Colonel KV Kuber is an alumni of the prestigious National Defence Academy, and the Technical Staff College. Colonel  Kuber, specialized in Electronic Warfare. He founded and established the DOFA and was the chief architect of the offset policy since its inception in 2005. He has been closely associated with the formulation of the offset policy in 2006 and modifications to the Offset Policy in 2008 for the Ministry of Defence.

In his brief span of 18 months in corporate, he has single-handedly advised number of foreign OEMs and Indian companies on offsets and has developed and structured offset programs worth more than $ 400 million.

Col KV Kuber is presently an External Advisor with Ernst and Young (India). 

Knowledge Resources
You will get access to following Knowledge Resources by subscribing to the Digital Library of this event.
Export Opportunities Through Counter Trade and Offsets Part II
Export Opportunities Through Countertrade and Offsets Part I
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