Our defence forces require timely and cost effective acquisition of defence equipment to enable them to meet any challenge to the country's security. Especially all of you who represent the strategic community know very well that we are living in an era of challenges from many quarters. The emerging security scenario is very challenging. Nobody can say what will happen in some of our neighbouring areas. The situation is that critical.

All-out wars are no longer the norm for settling disputes among states. Rapid globalisation has led to profound changes by creating interdependence amongst states and people making inter-state wars an era of bygone years. Liberal policies are increasingly connecting Asia to the world economy and building high stakes for peace and world order. India is committed to building a strong, non-discriminatory international norms and institutes to strengthen world peace and stability.

Offsets are today a common feature of international arms trade. It is estimated that offsets and related forms of counter-trade constitute 5 to 30 per cent of global trade. More than a hundred countries use the mode of offsets in their arms contracts. Business and trade analysts put the exact volume of defence offsets at the global level at over $5 billion each year. The United States, the biggest arms exporter in recent times, is obviously one of the largest providers of offsets.