The basic premise of offsets is to leverage the buying power of the home country to access expertise, manufacturing capabilities, products and services that it does not possess. Literally taken as compensation involvement or balancing, it seeks to acquire capabilities in order to ensure economic development of the country as well as future capacities. The mechanics usually involves assumption of a commitment by the exporter to acquire, build, operate, or initiate acquisition in the home country of a fixed value agreed upon by the two parties.
Defence has many opportunities available to the industry. Apart from routine purchase of defence systems, up gradation of legacy systems for land, air and sea defence is abundant. Newer forms of warfare cause requirements to emerge faster than their fulfillment.