OFFSET ( also known as Industrial cooperation ) is defined as a compensatory or reciprocal trade agreement normally used in sales to foreign government related transactions. The purpose is to compensate the buyer ( the government ) for consequences, economic or political, of acquiring a good or service from international sellers. Offset is extremely popular in defense and aerospace related industries wherein the governmental buyer mandates that the seller must perform certain activities. These activities are quite varied but normally require the buyer to purchase a certain percentage of the contract of the components or parts that will be used in the contractors project. Additionally, the buyer may require the seller to co-produce the product being sold, or transfer technology or render some technical assistance. In some cases the seller may be required to make investments or assist in some form of commercial projects. The offset amount is generally based on a percentage of the primary contract. This then becomes an obligation by the seller and the agreement must be followed in accordance to rigid terms and conditions.