India-US Howitzer Deal Likely To Be Postponed

India, which is buying BAE's M777A2 lightweight howitzers for its army to deploy it along India-China border, is facing another issue in purchase conditions.

The apex body that takes the final call on purchase of defense equipment has approved the deviations in the earlier approved purchase plan and now it will be referred to the Cabinet on Security for financial clearance, Indian defense ministry was quoted as saying by Sputnik News Thursday.

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.  

However, the original deadline for signing the deal was August 5. The US had extended by one month following a request made by India. 

Informing the Parliament in July this year, about the status of the deal, Manohar Parrikar, India’s Minister of Defense said, “Acceptance of Necessity (AoN) has been accorded for the procurement of 155mm / 39 Calibre Ultra-Light Howitzers from USA under US Foreign Military Sales route at an approximate cost of USD 737 million.”

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.