MoS Defence Ajay Bhatt, replying to a question, said offset claims worth USD 2.64 billion have been submitted in 47 contracts till December 31

NEW DELHI: Offset obligations were not fulfilled in 21 defence contracts in the last five years and a total penalty of USD 43.14 million was levied on firms involved in 16 such procurement deals, the government said in Rajya Sabha on Monday.

Minister of State for Defence Ajay Bhatt, replying to a question, said offset claims worth USD 2.64 billion have been submitted in 47 contracts till December 31.

Under India's offset policy, foreign defence entities, for all contracts worth Rs 2,000 crore or more, are mandated to spend at least 30 per cent of the total contract value in India through procurement of components, transfer of technologies or setting up of research and development activities.

However, the offsets are not applicable to procurements under 'fast track procedure' and in 'option clause' cases if the same was not envisaged in the original contract.

"The total number of offset contracts in which the vendors have defaulted/non-performed offset obligation during the last five years is 21 with non-performed amount of USD 2.24 billion till December 31," he said.

Bhatt said action is taken against the defaulting/non-performing vendors by imposing penalty after following the laid down procedure.

"And same has been completed in 16 contracts with levying of penalty amounting to USD 43.14 million till December 31," he said.

Bhatt was asked about the details including the amount involved in the defaulted/non-performed offset clause obligation of various vendors in the defence field during the last five years.

The question was particularly for those defence contracts which would not come within the ambit of 'subjudice' category.

A parliamentary standing committee last month asked the defence ministry to be more cautious and transparent in ensuring the fulfilment of offset requirements in defence contracts.

According to a report tabled in Lok Sabha, a total of 57 defence offset contracts have been signed as on date and the total obligations under them are estimated at around USD 13.52 billion.

"The committee have been apprised that as on date, a total of 57 defence offset contracts have been signed in the Ministry of Defence.

The total offset obligations are estimated at approx. USD 13.52 billion to be discharged over a period from 2008-2033," the report said.

"Out of the total contracted obligations USD 4.59 billion has been discharged by the vendors, of which USD 2.9 billion has been accepted in audit and the balance claims are under clarification/examination," it said.