BAE Systems will deliver two of the contracted M777 ultra-light howitzers within six months to the Indian Army to test integration of local ammunition for the gun.
“The range tables were required when integrating local ammunition in use by the Army with the gun and calibrating it against a whole lot of variables such as weather and temperature,” a senior officer was quoted as saying by the news daily.
India signed a deal with the US for importing 145 BAE Systems’ M777 lightweight Howitzers costing $750 million on December 1 this year.
Earlier this year, BAE Systems announced a plan to establish an Assembly, Integration & Testing (AIT) facility in India as an integral part of the offset offer to the Government of India.
The offset offer commits to investing in, and the development of, a number of Indian defence suppliers, providing them with access to the BAE Systems group across Air, Land, Sea and Security programs. The conclusion of this procurement will enable BAE Systems to make an investment of over $200 million in those Indian defence suppliers.
The Indian defense procurement agency has approved the proposal in June. The deal had not progressed since 2012 due to cost issues and because the BAE had not been able to come up with a proposal fully complaint to the offset requirements.
The original deadline for signing the deal was August 5. The US had extended by one month following a request made by India.
In August, India sought a second extension of the deadline for the deal. The deal was supposed to be signed before September five, If India wants to buy the guns at the original price mentioned by BAE. In case if the date exceeded, BAE would demand a 10 percent price increase.
As per schedule, the first lot of deliveries will begin 21 months after the initial payment which, defence officials say, will be done about five weeks from the signing of the LoA. Of the 145 guns, 25 will be imported and the remaining 120 assembled in India. BAE Systems expects to sign an agreement with the U.S. Department of Defence soon to execute the contract.