India’s Ministry of Defense has postponed the planned purchase of 145 ultra light howitzers from BAE Systems stating offset obligation issues, according to Defense News.
The reason for further delay in formalizing an agreement is that BAE systems has asked for six years, instead of four, to meet its offset obligations, an MoD official was quoted as saying. According to Indian law, overseas defense companies have to discharge offsets up to 30 percent of the value of the contract.
The program had been approved in 2010 but has not yet received a formal go-ahead. Meanwhile, the estimated cost of the 145 guns has risen from about $493 million in 2010 to $885 million because of inflation.
The MoD had originally selected Singapore Technologies, but that deal was canceled after charges of alleged corruption.
According to various reports, the deal may not be signed until the next government takes charge later this year. Adding, India’s defence expenditure for the current fiscal year is also believed to be minimal.
The Indian ministry of defence (MoD) has apparently cleared all the pending queries on the manufacturer of the M-777 ultra-light Howitzers - regarding the proposed acquisition for 145 of these artillery guns, but the deal with the US through the Foreign Military Sales (FMS) programme will not be inked yet. According to various reports, the deal may not be signed until a new government is in place later this year
Indias removal of Denel from its blacklist and the cancellation of a deal to buy 145 M777 ultra-light howitzers from BAE Systems has thrown open its howitzer procurement programs. The Indian Army has been petitioning the government for over a decade for rapid procurement of artillery guns
The Indian Army has completed trials for two 155 mm/52 calibre howitzer systems and is preparing a report for the Ministry of Defense. Official sources said two competing 155 mm/52 caliber towed gun systems and two 155 mm/52 caliber self-propelled tracked howitzers recently completed maintainability acceptance trials and secured Directorate General of Quality Assurance clearance
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