Japan and India are set to continue talks early next month about the Indian Navy's proposed USD1.65 billion procurement of Japan's ShinMaywa US-2i search-and-rescue aircraft.
IHS Jane's understands that a key element of negotiations is the defence offset package, which will need to comply with India's policy that calls for at least 30% of the value of a defence contract to be returned to local industry through technology transfer or related investment.
In most cases this effectively means technology transfer leading to licensed production, activity that Japan has never been in a position to support due to the decades-long ban on military hardware exports that was lifted by Tokyo just five months ago.
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