Sunday 27 January 2013

BAE Systems to sell more howitzer guns, aircraft to India soon


Mumbai, Jan. 27:  
Almost two years after deciding to buy light howitzer guns from the US subsidiary of BAE Land Systems, the Indian Defence Ministry has initiated talks with the US Government to procure M777 light howitzers. The deal is likely to be inked before the end of March.
Under the contract, worth $700 million, the UK-headquartered BAE Systems is to deliver the guns as completely built units.
Direct deal
Speaking to Business Line on condition of anonymity, an official said this would be “a direct G2G deal (Government to Government) between India and the US and would be facilitated under the US Government's foreign military sales route.”
A rapidly growing Indian economy, Defence preparedness challenges and opening up of Defence production to the private sector have given the sector a major fillip.
The US Government had sent two units of the M777 to India for trials last year. The M777 howitzer is a 39-calibre towed artillery gun and weighs 4.2 tonnes. The official added that BAE Systems has supplied the M777 to Canada and Australia, besides the US.
India is a key international market for BAE Systems. It has been present in the country for 60 years and has an office in New Delhi.
The company has two joint ventures, one of them with Mahindra and Mahindra for land systems. On January 23, M&M and BAE Systems announced a strategic review of their joint venture. The other venture is with Baehal, that undertakes software engineering services for Defence companies.
In 2004, India inked a contract to buy 66 Hawk Advance Jet Trainers worth $1.63 billion from BAE Systems for the Indian Air Force. The deal included options for another 40 aircraft.
The second batch is being licence-built by Hindustan Aeronautics Limited (HAL) in Bangalore. The overall project cost is estimated at Rs 16,000 crore.
Potential third batch
“In 2004, the first batch of 66 Hawks was contracted, comprising some aircraft in fly-away condition and some built under licence by HAL. In 2010, there was the second batch with 57 aircraft.
With a total of 123 Hawks purchased by India as of now, BAE has received an RFP (request for proposal) for 20 more aircraft that could potentially make up the third batch,” said the official.
The aircraft, to be built by HAL, will fulfil the Air Force’s requirement for its prestigious aerobatic team. A 20-plane third order would bring India’s Hawk fleet to 143, making the country the world’s third largest Hawk operator, behind the US Navy and Britain.
Given BAE’s partnership with HAL, BAE is to “assist, enable and support the production line of the Hawk aircraft by HAL. The Hawk programme is progressing well. HAL is now manufacturing the aircraft,” said the official.
With India’s Defence industry set to become a hub for Defence business in the Asia region, the potential addition to the Indian fleet would take the number of Hawk aircraft ordered worldwide to over 1,000.
The UK Royal Air Force aerobatics team, Red Arrows, has used the BAE Systems Hawk since 1979.

A third order for 20 aircraft would bring India’s Hawk fleet to 143, making it the world’s third largest Hawk operator, behind the US Navy and Britain.

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