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May 27, 2021(Words: 332)
Boeing (an American aerospace company) has confirmed that its expected sale of Boeing P-8I patrol aircraft to India will be accompanied by an offset obligation worth 30% of the value of the sale. The deal is estimated to be around $2.42 billion and consists of P-8I six aircraft, equipment, spares, and other support.
What is offset policy?
The offset policy was initiated in 2005, under which for contracts valued at ₹300 crores or more, 30% of it will result in offsets, implemented through Indian offset partners. The policy is helping to promote a vibrant aerospace cluster, mostly micro, small, and medium enterprises (MSMEs) in the country.
The offset is an obligation by an international body/company to enhance India’s domestic defence industry in case, India is buying defence equipment and technology from the company. The first contract that included the offset policy was in 2007.
The timeline of the deal
In November 2019, the Defence Acquisition Council, chaired by Defence Minister Rajnath Singh, approved the purchasing of the Boeing P-8I Neptune maritime multi-mission aircraft by Boeing with other defence equipments. The original proposal was to procure ten aircraft but later it was settled to six due to budget constrain
On 30 April 2021, The U.S. State Department confirmed the anticipated sale of six P-8I patrol aircraft and related equipment. And finally, Boeing confirmed that its expected sale of P-8I patrol aircraft to India will be accompanied by an offset obligation worth 30% of the value of the sale.
In 2009, the Navy procured eight P-8Is in a $2.2-billion deal. The aircraft is part of the 312A Naval Air Squadron based at Arakkonam in Tamil Nadu.
P-8I patrol aircraft
Boeing is offering The P-8I aircraft to the Indian Navy. the P-8I is a long-range, multi-mission maritime patrol aircraft. The aircraft replaced the present fleet of the Indian Navy’s Tupolev Tu-142 aircraft. The P-8I aircraft is a variant of the P-8A Poseidon multi-mission maritime aircraft (MMA) operated by the US Navy.
