The Indian Cabinet Committee on Security, headed by Prime Minister Narendra Modi has approved the purchase of 145 M-777 ultra-light howitzers from the US for $737 million.
The M-777 deal will now be signed within the next two to three weeks. The Pentagon’s Letter of Offer and Acceptance (LoA) to India is valid till November 20, but the same can be extended by another 10 to 15 days, if needed, Defense ministry sources were quoted as saying by Tehelka Thursday.
Of the 145 M-777 howitzers, 120 will be assembled, integrated and tested in India. In this regard, BAE Systems has chosen Mahindra as its business partner in the country.
The Indian Army had put on hold all its artillery modernization plans after Bofors scandal broke in the mid-1980s. BAE Systems owns the earlier Bofors company that manufactured howitzers.
The LoA for the M-777 deal for which the two government were in talks since 2009-2010 had expired on November 7. Both sides made haste to extend the validity of the LoA that also has a 30 per cent offset clause.
After six months of the deal being inked, the first two howitzers will be delivered. The remaining will follow at the rate of two per month.