BAE Systems selects Mahindra as partner

Govt has six months to decide on gun deal

The Defence Ministry has six months to respond to a US government proposal to purchase M777 ultra light weight howitzers through a government-to-government contract as the manufacturer of these Howitzer has announced selection of its local partner to manufacture these guns in India.

The gun maker, BAE Systems on Wednesday announced picking up Mahindra for the in-country Assembly, Integration and Test (AIT) facility for the M777 A2LW155 ultra lightweight howitzer.

India and the US are in discussions to purchase 145 of these guns through the foreign military sales route. It was being negotiated for several years after successful trials in the mountains. The Army plans to utilise these guns for high-altitude warfare in the North East and in Jammu and Kashmir.

The costing was the bone of contention. In March, 2013, the US government offered the deal at $694 million with 30 per cent offset. The proposal, however, did not materialise as the deal expired for want of a response from the defence ministry in time.

The US government had subsequently taken an approval from the US Congress to offer the M-777 deal to India at a ceiling price of $ 885million – an increase of 27 per cent. However, shifting the AIT facility to India is expected to reduce the cost factor significantly.

In 2015, the company submitted a US government-supported proposal offering a higher degree of indigenization on the M777 weapon system. The proposal's highlight was to establish the AIT facility in India in partnership with a domestic company. “The facility is a fundamental part of the M777 production line. A domestic facility will enable the Indian Army to access maintenance7,” said Joe Senftle, vice president and general manager, weapon systems, at the BAE Systems.