BAE Systems picks Mahindra as partner for artillery gun deal

February 17, 2016 01:07 pm | Updated December 04, 2021 11:04 pm IST - New Delhi

This year could well be a turnaround for the Indian Army in its long endeavour to bury the ghosts of the Bofors scandal and equip its forces with new artillery guns. The U.S.-based BAE Systems has picked the Mahindra group as a partner for the M-777 Ultra-Light Howitzer (ULH) deal under which an assembly, integration and test (AIT) facility is to be set up in India under the government’s Make in India initiative.

“BAE Systems looks forward to working with Mahindra in the coming weeks to finalise details of this AIT facility and to negotiate the terms of its contractual arrangement,” BAE Systems said in a statement on Wednesday. The selection was based on a detailed assessment of several Indian companies on their capabilities.

This development coincides with developments on the government front. The deal for 145 guns, which is expected to cost $700 million, is being discussed as a government-to-government deal under the Foreign Military Sales (FMS) programme. The U.S. government is expected to issue the Letter of Acceptance (LoA) to India this week, formalising the deal.

BAE Systems officials had earlier said that the deal envisaged investing in 40 Indian defence suppliers across the country with an emphasis on the Defence Public Sector Undertakings (DPSU) and the MSME (Medium, Small & Micro Enterprises) sector in addition to the AIT facility.

M-777 guns, weighing just about 4 tonnes, are the only ones in this category and can be transported by helicopters, which is crucial for the Army’s mountain strike capabilities on the eastern sector bordering China.

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