* Whenever a Foreign Original Equipment Manufacturer (OEM) gets a contract of Rs 300 crores or more, he is required to discharge offsets obligations (which is 30% or more of the contracted value) as per the provisions of offset contract which is signed along with main contract. As per Clause 3.1 of Defence Offset guidelines given at Appx D of Chapter 1 of DPP 2013, there are six avenues to discharge offset obligations.
* FOEM can discharge offsets as per clause 3.1 well in anticipation of a future contract(s) which he can bank with Defence Offsets Management Wing (DOMW) and will be valid for seven years. Banked offset credits can be used to discharge up to 50% of total offset obligation under each procurement contract.