India signs Rs. 50 billion defence deal with US


NEW DELHI (APP) - India has signed a $750 million agreement with the United States to buy 145 howitzer artillery guns from BAE Systems, an official said Thursday, its first such deal in three decades.

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India , the world's number one defence importer, is updating its military capabilities with hardware worth tens of billions of dollars in the face of long-standing tensions with regional rivals China and Pakistan.

It has been in discussions since 2012 to buy BAE Systems' M777 ultra-lightweight guns through the US Foreign Military Sales programme.

"India has signed the letter of acceptance which formalises the contract between India and the US for the howitzer guns," a defence official told in New Delhi.

The deal, worth nearly 50 billion rupees, will see 25 guns being delivered in ready-to-use condition with the rest being assembled in India , the official said on condition of anonymity.

The howitzers, with a maximum range of 30 kilometres (17 miles), will be used by the army's mountain artillery divisions along India 's high-altitude frontiers.

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India has fought three wars with arch-rival Pakistan since independence in 1947, but China is increasingly seen as the main focus of its ambitious military modernisation and procurement policy.

India last purchased howitzers for the army in 1986, when it bought 410 field guns from the Swedish arms giant AB Bofors.

The Bofors deal became mired in corruption allegations and cost then Congress Prime Minister Rajiv Gandhi the 1989 national elections.

BAE Systems said in February it had chosen India 's Mahindra group to build a plant for assembling the artillery guns.

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Prime Minister Narendra Modi has said he wants foreign manufacturers that win lucrative hardware deals to invest in India by partnering with local firms.

"The first two howitzers should be delivered within the next six months," the official said.

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