India clears deal to buy 145 artillery guns at $750 million from US

  • Agencies, New Delhi
  • Updated: Jun 25, 2016 16:35 IST
Under the deal, 120 of the 145 145 M777 Ultra Lightweight Howitzer artillery guns from BAE Systems will be assembled in India. (Reuters File Photo)

The defence ministry paved the way on Saturday for purchase of 145 M777 Ultra Lightweight Howitzer artillery guns, worth about $750 million, from the US and also approved bulk production of 18 Dhanush artillery guns, the first acquisition of such a weapon systems by the Indian Army in three decades since the Bofors scandal.

The Defence Acquisition Council (DAC), chaired defence minister Manohar Parrikar, took up 18 proposals including new schemes worth Rs 28,000 crore for discussion.

Prime Minister Narendra Modi wants to upgrade the country’s military hardware by replenishing its range of artillery weapons after years of delays in ordering new equipment.

But Modi wants deals with foreign companies to include the setting up of factories and plants in India to boost the local industry.

Another key project that got an Acceptance of Necessity (AON), which will now allow the Indian Navy to issue tenders, was the proposal to build six next generation missile vessels under ‘Buy Indian’ category for Rs 13,600 crore.

“DAC has approved progressing of ongoing case of procurement of 145 ultralight howitzers through the foreign military sales (FMS) route from US. DAC directed independent progressing of offset. The delivery of these guns will be in India which will help in substantial saving of transportation cost,” a senior defence ministry official said.

The DAC has also shortened the supply period of the guns, with a strike range of 25km, sources said though the exact period could not be known.

Explaining the process, the officer said that India had sent a letter of request to the US government showing interest in buying the guns which will be deployed in high altitude areas in Arunachal Pradesh and Ladakh, bordering China.

The US had responded with a letter of acceptance and the DAC looked into the terms and conditions and approved it.

This letter will now be sent back to the US and the process for the payment of first instalment will begin.

The offsets, under which BAE Systems, manufacturer of the gun, will invest about $200 million, will be pursued independently.

While 25 guns will come to India in a fly away condition, the rest will be assembled at the proposed Assembly Integration and Test facility for the weapon system in India in partnership with Mahindra.

The DAC also noted the “satisfactory progress” in manufacture of indigenous Dhanush guns, also known as Desi Bofors.

“While three guns would be delivered for user exploitation by June 30, three more will be handed over by September end. DAC also cleared bulk production of 18 guns to enable better exploitation and setting up of indigenous production,” the officer said.

The gun, a towed howitzer with a strike range of 38-km, has been developed by Ordnance Factory Board (OFB), Kolkata, after going through the design and voluminous documents running into more than 12,000 pages which were delivered to India under the first phase of Transfer of Technology as part of the Bofors gun deal in late 80s.

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