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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