India is set to award its largest order for military equipment to the private sector, with the Ministry of Defence concluding negotiations with Larsen & Toubro for 100 new mobile artillery guns that may be deployed along the western border to blunt the edge that Pakistan has with US-supplied weapons.
The Rs 4,500-crore contract for the K9 Vajra-T howitzer, which had been under price negotiations since the beginning of this year, has been finalized and the defence ministry is set to move it to the Cabinet Committee on Security for approval.
Besides being the first artillery gun to be made by a private firm in India, only the Ordnance Factory Board has produced howitzers in the past, the value of the contract makes it the largest to be entrusted to the industry.
“The deal has now been frozen as the price negotiations have been completed. A Cabinet approval for the contract is expected to come through over the next month or so, following which the order will be placed,” a person involved in negotiations said.
L&T, which has Samsung as its technology partner for the contract, will produce the guns in India under a JV company. Close to 50% of the gun will be indigenized and manufactured in India at L&T’s Strategic Systems Complex at Talegaon near Pune. The 155-mm artillery guns are specially designed for operation in the desert areas bordering Pakistan and have been a long-standing requirement of the Indian Army.
The mobile artillery guns will take on a Pakistani battlefield edge on the back of artillery guns supplied by the US. Concerns over Islamabad acquiring a conventional edge heightened in 2009 when the US supplied it 115 of the modern M109A5 cannons as a ‘reward’ for its assistance in the war on the Afghanistan border.
While the initial order is for 100 guns to be delivered within four years of signing the contract, the number may double as the deal has a follow-on clause. L&T won the bid for the army’s contract last year in a global competition against a Russian company, which failed to clear technical trials.
Industry experts said the contract would boost the private sector, which has been scouring for orders from the defence ministry. “This proposed contract, which could well be the single largest inked by an Indian private sector player, will have a multiplier effect not just on the revenue but also on the confidence of the relevant tiered participants of the indigenous defence industrial base. In addition, it will serve as a beacon for other private players when it will eventually get signed,” said Ankur Gupta, vice-president A&D at EY India.
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