India on Wednesday signed the Letter of Agreement and Acceptance (LOA) with the US to purchase 145 M777 ultra-light artillery guns, through the foreign military sale (FMS) route.
The Cabinet on November 17 approved the much-awaited deal, which would add tremendous firepower to the Indian Army, especially against China in eastern front.
The air portable 155mm/39 calibre gun, with maximum range of 30 km, is manufactured by BAE Systems.
Welcoming the signing of the agreement, BAE system in a statement said: "The company anticipates signing a contract in the coming weeks with the US Department of Defense to supply these M777 Howitzers to the Indian Army."
"We look forward to providing the Indian Army with the combat-proven M777," said Joe Senftle, Vice President and General Manager for Weapon Systems at BAE Systems.
"Our plan to establish a domestic Assembly, Integration and Test facility further demonstrates our commitment to 'Make in India' and remains a firm part of our strategy to work with the Indian defense sector across Air, Land, Sea and Security."
The $737 million contract has a 30 per cent offset clause worth around $200 million.
Out of 145 guns, BAE will deliver 25 guns and rest 120 will be assembled in India by Mahindra.
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