BAE Systems Inc. has tied up with Mahindra Defence Systems Ltd. to supply ultra-light Howitzer guns to Indian armed forces.
“We have tied up with Mahindra Defence for assembly, integration and testing of the guns,” Alistair Castle, country director of U.S.-based BAE Systems, told BloombergQuint on the sidelines of 10th Defence Expo in Chennai.
BAE Systems bagged order for 145 M777 ultra-light howitzers from the government last year. The company will deliver 25 guns to the Army in flyaway conditions as per the contract, said Castle.
The deal for foreign military sale with the U.S. government is valued at $700 million, with $542 million flowing back to the BAE Systems.
The company will increase its delivery to two guns a month by the end of 2018. Once it supplies 25, the remaining would be manufactured at Mahindra Defence facility in Faridabad, Haryana, said Castle.
The gun order has nearly $200 million of offsets – minimum investments by a foreign supplier in India – would be divided among Indian vendors including Mahindra Defence.
Setting up of the guns assembly facility will be part of the offset agreement, said a Mahindra Defence official. The company will start delivery of the guns starting fourth quarter of 2019 and finish it in 2021, the official said.
“We would be using this partnership with Mahindra to bring more weapon systems in India,” said Castle.