(Bloomberg) -- India is set to finalize a $660 million deal for mobile heavy artillery weapons -- its third major gun purchase in the past year and a sign Prime Minister Narendra Modi's defense spending spree is far from over, according to people with knowledge of the matter.
The deal, expected to be approved in a cabinet decision in the coming days after extended commercial price negotiations, is a big win for Larsen & Toubro Ltd., a major Indian infrastructure and engineering company which partnered with South Korea's Hanwha Techwin to modify the howitzer for local conditions.
It's part of Modi's $250 billion push to modernize the armed forces and overcome a 30-year lapse in its firepower procurement program, as India prepares to counter potential threats from Pakistan and China.
Space the Final Frontier for India's Military Modernization Push
An Indian Army officer, who did not wish to be named as the matter is yet to go public, said the purchase contract for the 100 guns offered by L&T is pending final clearance and will soon go to the Cabinet Committee on Security for approval.
A second person familiar with the discussions who could not be named said the deal had been approved by the Ministry of Defence and was now with the Ministry of Finance. The proposal would be sent to cabinet for endorsement soon, they said.
Artillery modernization is long overdue, said Anit Mukherjee, assistant professor in the South Asia Program at the S. Rajaratnam School of International Studies at Nanyang Technological University in Singapore.
"Once these are inducted, these will give significant capabilities to the Indian military, both in the mountains and in the plains." After the cabinet approves the deal, it could take two-to-four years before the weapons are delivered to India, he said.
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India Ministry of Defence spokesman Nitin Wakankar had no comment to offer on the possibility of the deal for the 155-mm 52-caliber K9 artillery gun -- modified for the army's need for a highly mobile, long-range deep fire support weapon with a higher rate of fire -- being signed.
An email and phone calls to Larsen & Toubro seeking comment on the deal remain unanswered.
Since July last year, India's state-owned Ordnance Factory delivered six locally-made 155-mm 45-caliber ‘Dhanush' guns. In November, India signed a $737-million deal with the U.S. for buying 145 155-mm 42-caliber M777 guns.
India's Defense Minister Manohar Parrikar said on Nov. 18 in New Delhi that the Indian Army had in mid-2016 inducted the Dhanush guns which would be tested by soldiers before more were added to the artillery regiments.
Some of these acquisitions are legacy items, Mukherjee said. The Dhanush project was started under former defense minister A. K. Antony in 2012 and the M777 howitzer deal was also under consideration earlier. "But it's true that the Modi government made it happen," he said.
S.K. Chatterji, an independent strategic affairs analyst based in Delhi and a former brigadier in the Indian Army's artillery regiment, said the acquisition of the guns "will tremendously improve the conventional war fighting capability of the Indian Army."
"Artillery is the weapon of choice when armies want to deploy a great amount of firepower on the enemy, but without escalating the battle to missiles deployment. Artillery also gives the stand-off advantage to forces," Chatterji said.
"The government has been aware that not a single artillery gun had been procured for 30 years now," he said, noting other significant weapons tenders were underway. "These are just the beginning."
To contact the reporters on this story: N. C. Bipindra in New Delhi at nbipindra@bloomberg.net, Rajesh Kumar Singh in New Delhi at rsingh133@bloomberg.net. To contact the editors responsible for this story: Unni Krishnan at ukrishnan2@bloomberg.net, Ruth Pollard
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