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The army is closing in on its first modern artillery gun purchase in almost three decades since the Bofors FH-77B field howitzer was bought in the mid-80s. So politically paralysing were the ripples from that controversial deal that buying artillery has been well nigh impossible since then.
Reaching the end of a lengthy evaluation now is the estimated $650-million (Rs 4,000-crore) purchase of 145 M-777 ultra light howitzers (ULHs), developed and built by BAE Systems, but to be procured through a foreign military sale (FMS) contract. In this, India will buy the gun from the US Department of Defence (the Pentagon); the Pentagon negotiates terms with the supplier (in this case, BAE Systems) and charges a small percentage for its services.
A contentious element of this procurement — offsets — is now almost resolved. On January 22 2010, Washington had indicated there would be no offsets. Since then, BAE Systems has accepted an offset liability of 30 per cent of the contract value, amounting to about $200 million. Of this, 30 per cent can be discharged by transferring technology, while at least 70 per cent must be discharged through sourcing equipment manufactured in India.
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BMCS technology is urgently required by the MoD for the coming Ordnance Factory, Nalanda, where a range of ammunition would be built. First Denel, and then Israel Military Industries (IMI), were to supply technology, but the MoD has blacklisted both those firms for alleged corruption.
“Our discussions have enabled us to arrive at an offset package which will help support the development of the Indian industrial supply base, building sustainable world-class indigenous capabilities and strengthening our existing global supply network. As we go forward, we see the Indian supply chain as being particularly relevant across our air, land and sea programmes both locally and globally,” says Dean McCumiskey, who heads BAE Systems India.
Given the ongoing negotiations, the Pentagon has accepted the MoD’s request to extend the validity of its commercial offer. Anticipating an order, the BAE Systems assembly line in the US, where gun components manufactured mainly in the UK are integrated into the M-777, is being kept active. A delay in finalising a contract, say US government sources, would mean added expenses for reviving a shut assembly line. Foreign exchange risk is another variable. But an early closure of the contract would see the first M-777 guns being delivered by early-2014.
Last month, New Delhi announced the raising of a mountain strike corps over the next seven years. The M-777 ULH is being procured for the artillery regiments of this new formation. For BAE Systems, the M-777 offers possibilities well beyond the current order of 145 guns. It could end up equipping artillery regiments in up to seven more Indian corps deployed in mountainous terrain.
India’s 220 artillery regiments have been making do with equipment procured in the 70s and 80s. The obsolescent Russian 130-mm medium gun equips the bulk of the medium regiments. The most modern guns--- 410 Bofors 155-mm FH-77B medium howitzers--- were bought more than a quarter century ago. These are 39-calibre guns that fire lighter projectiles than the 45-calibre, or 52-calibre, guns that are standard today.
Indigenous initiatives are underway to obtain modern artillery. The Ordnance Factory Board (OFB) has been asked for 140 guns, built from Bofors blueprints, which would be 45-calibre. Simultaneously, a major DRDO project has been launched, in partnership with private industry, to develop and manufacture a 155-mm /52-calibre modern artillery system.
But the M-777 will remain relevant, since the heavier indigenous guns would be too bulky for deployment in India’s rugged mountain borderlands. Built partly from titanium, a helicopter can lift the M-777 to remote gun areas, providing the army with deployment options that standard howitzers do not offer.
If India buys the M-777, it would be the world’s fifth user. More than 1,000 M-777s are in service with the US Army, the US Marines, and the Canadian and Australian armies.
