Millennium Post

Commerce Ministry to seek Cabinet nod on offset policy

Commerce and Industry Ministry would soon seek Cabinet’s approval to roll out a national offset policy that proposes to make it mandatory for foreign firms source part of their government or PSU contracts from domestic manufacturers.

The draft policy proposes that foreign firms selling goods worth over Rs 300 crore to the government or PSUs will have to source part of their supplies from domestic manufacturers.

“The draft policy was discussed comprehensively in the Committee of Secretaries meeting. The Commerce Ministry has addressed issues being raised by some concerned ministries.

“Soon, it would send the draft national offset policy (NoP) for Cabinet’s approval,” a senior government official said. NoP mainly aims at boosting growth in the manufacturing sector. It will also help attract investments; acquisition of new technology, raw material and assets; improve balance of payment; increase R&D capacity and enhance exports.

According to the draft policy prepared by the Commerce Ministry, minimum value of the offsets obligation would be 30 per cent of the estimated cost of import, which means that the company will have to procure this percentage from local players as the government aims to boost domestic manufacturing. Sources said the policy would be applicable to procurement by central government as well as state-run firms. Sectors covered under the NoP include civil aerospace, power, fertiliser, railways and other transportation, ports and shipyards, mining, medical equipment, medicine and telecom.

However, sectors such as defence, atomic energy and space will not be covered under the policy. Defence sector has a separate policy, while atomic energy and space would pursue offsets in their
contracts independently. As part of ‘Make in India’ campaign, the government is taking several steps to boost growth of manufacturing and create jobs. Manufacturing output, which constitutes over 75 per cent to the index of industrial production (IIP) or factory output, grew by 1.7 per cent in April-January period as compared to a contraction of 0.3 per cent in the year-ago period.

Govt to bring a new bill to replace old laws on ports
Government will bring a new legislation to replace outdated laws relating to ports as part of efforts to ensure that regulations keep pace with time, Union Minister Nitin Gadkari said on Thursday.

Besides, the Shipping Minister also pitched for amending rules to allow modernisation of ports, including by utilising dollar loans.

Responding to a query on existing old laws that pertain to definition of minor and major ports, Gadkari said these legislations were made long ago and should be amended with a modern outlook.

“There is a need to do away with outdated laws... This would help improve efficiency of ports and adapt new technologies,” the Minister said during Question Hour in the Lok Sabha.

“In three months, I will bring the bill to replace these laws. We will bring it in the next Parliament session,” he added. To another question, he said if there is cooperation from members, changes can be made to laws pertaining to ports as the existing ones do not allow taking dollar loans for developing ports.
Next Story
Share it