The move is aimed at boosting local manufacturing. "It (national offsets mechanism) will primarily cover central government procurement, including procurement by PSUs, except defence procurement, which is already covered by an offset policy," said the new Foreign Trade Policy (FTP).

There would be threshold and only contracts above that would have to incorporate offsets, it said, adding that "the minimum value of the offsets obligations would be 30 percent of the estimated cost of the acquisition".

At present India has an offset mechanism for the defence  sector under which foreign suppliers have to buy at least 30 percent of the total value of the supplies locally.

The new mechanism being proposed aims at technology transfer; acquisition of assets in the importing country; investments; augmenting capacity for research, design and development; long-term supply agreements; enhancing exports; and creation of employment opportunities.
According to an official, the Commerce Ministry has collected views of concerned ministries and are in the process of finalising a Cabinet note on it.
As part of the 'Make in India' campaign, the Government is taking several steps to boost growth of manufacturing sector and create jobs.
To boost India's economic growth, manufacturing sector would play a major role. The government aims at increasing the share of the manufacturing sector to 25 percent of GDP in a decade from the current about 16 percent.

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