NEW DELHI — India's Defence Acquisition Council, headed by Defence Minister Manohar Parrikar, has cleared the purchase from the US of 145 M777 ultralight howitzers through the Foreign Military Sales (FMS) route.
A senior Ministry of Defense (MoD) official, who spoke on condition of anonymity, said that following intense negotiations with the US subsidiary of BAE Systems, a price has been settled on and offset problems related to the acquisition of the howitzers have been resolved.
The BAE subsidiary, which is the original equipment manufacturer, has agreed to all MoD conditions without increasing the price, the MoD official said, adding that now the case will be put up before the Cabinet Committee on Security for final clearance, followed by the official awarding of the contract.
Per the FMS deal, the subsidiary will discharge $200 million worth of offsets.
The MoD issued a letter of request to the US government in 2013 expressing interest in buying the M777 artillery guns.
Under the deal, the US subsidiary will supply 25 M777 ultralight howitzers in fly-away condition, and the remaining will be assembled in India in partnership with the private sector company Mahindra Defence Systems.
The two companies will jointly set up an assembly integration and test facility for the M777 artillery guns near New Delhi.