Offset as part of counter trade policy has been practised by numerous countries for 30 years but only in recent years, have developing countries, begun to implement offset for major defence and civilian capital purchases. Most of the developed countries have been using offset programme as platforms to develop industrial capacity and capability. Countries like Japan, Sweden, Germany and other develop countries use offset programme to encourage production and co production related to the systems being acquired. Many newly industrialised countries like Taiwan, Korea, Singapore and etc focus more on the technology transfer in defence or comparable high- technology industries.
Offset arrangements are part of the of the contract agreements that are designed to help purchasers obtain the desired transfer of technology and provide local employment.
Offset programme is guided by the macroeconomic framework of Malaysia's Vision 2020, the Five Year Development Plans, Industrial Master Plan, the National Policy on Science, Technology and Innovation and Economic Transformation Programme (ETP). In line with the latest Government Procurement Policy and Regulation, offset has become a mandatory requirement for Government Agencies to undertake strategic and high value procurements.