M777 Howitzers deal to bring over $200 million investment in India

NEW DELHI: The decision to acquire 145 pieces of M777 Ultra-Light Howitzers from the US under a government to government deal, would see its manufacturer BAE Systems investing over $200 million here, which will give a boost to the government's 'Make in India' initiative.

The investment will be part of the 30 per cent offset policy. It envisages investing in about 40 Indian defence suppliers with an emphasis on the Defence PSUs and the MSME (Medium, Small & Micro Enterprises) sector. It also offers to establish an Assembly Integration and Test facility for the weapon system in India in partnership with an Indian industrial company.

"In discussion with the US government, BAE Systems has developed a strong case with a fully compliant offset proposal, which meets India's offset objectives, of over $200 million," Vice President (Business Development and Strategic Planning Land and Armament) BAE Systems, John Kelly said.

He said that the company will continue to support the Indian and US governments to bring this case to expeditious conclusion in order to fulfill the Indian Army's requirement for the howitzers.

Talking about the proposed Assembly Integration and Test facility for the weapon system in India in partnership with an Indian firm, he said, BAE Systems has received interest from a number of companies.

"BAE Systems is currently evaluating the proposals to identify the right company to establish this capability and to further the goals of India's offset policy," he said.

Though the Defence Ministry has put the figure of the deal at Rs 2,900 crore, defence experts say the price will go up due to the dollar vs rupee rate and price revising.

The Army is in desperate need of new artillery guns. Defence sources have said that this deal would be through Foreign Military Sales (FMS) but the "spares, maintenance and ammunition will be operated through Indian systems".