India-US Sign 145 M777 Howitzer Deal For $750 Million

India has signed a deal with the US for importing 145 BAE Systems' M777 lightweight Howitzers costing $750 million.

BAE Systems anticipates signing a contract in the coming weeks with the US Department of Defense to supply 145 M777 Howitzers to the Indian Army, the company said in a statement Wednesday.

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.