Offsets Deal Kills BAE-India Howitzer Deal?

India’s long-pending howitzer procurement deal could bite the dust with the Defense Ministry citing the “artillery guns are way too expensive to buy for the new Army divisions”.

According to the Times of India, no final decision has been taken yet, but there is "no way" 145 BAE Systems M-777 ultra-light howitzers could be bought for over $800 million.

The report added that BAE Systems has "failed to come with a viable and compliant offsets package'' in what is supposed to be a government-to-government deal under the US foreign military sales (FMS) programme. 

"Alternatives to the M-777 guns can be found for half the cost. Though in a different class, the indigenous Dhanush howitzer for instance is being manufactured at a cost of Rs 14 crore per gun," said a source. 

The program was first approved in 2010 when the estimated cost of the 145 guns was about $493 million but this has now risen $885 million because of inflation.

The Indian Army has an urgent requirement for 155mm/39-calibre light-weight howitzers, with a strike range over 25-km range.

India has not bought artillery guns since the Bofors deal in 1986. And The Ultra-Light Howitzers are expected to be stationed in the Northern sector and North-east in the areas bordering China and is expected to dramatically boost the firepower of the Indian Army.