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NEW DELHI— BAE Systems PLC has offered to build a howitzer factory in India to close a deal valued at more than $800 million after years of stalled talks left it closing plants in the U.S. and the U.K. that were supposed to produce the artillery.
The proposal highlights India’s growing clout as the world’s largest arms importer and the potential pitfalls facing Western defense companies trying to counter slowing domestic spending by expanding in overseas markets.
U.K.-based BAE’s U.S. arm has been negotiating since 2010 to sell 145 M777 howitzers to India that would replace aging weapons used in guarding its borders with Pakistan and China with equipment utilized by the U.S. and Canadian armies. Talks have repeatedly stalled over price and the share of the work that would be done in India.
With other orders drying up, BAE mothballed one factory in the U.K. in 2013 and plans to close the last M777 assembly facility at Hattiesburg, Miss., cutting the remaining 50 jobs at the facility.
BAE said it was also chasing howitzer orders from the U.K. and some Middle Eastern governments, and envisioned that an Indian plant could become its single global assembly center for the weapon.
“Our proposal envisages establishing the [M777] capability with a suitable Indian manufacturing partner,” said John Kelly, vice president business development at BAE Systems Inc., the company’s U.S. arm.
BAE said it made the offer directly to the Indian defense officials late last year, though the proposed deal is being negotiated by the Pentagon. The U.S. Defense Department typically inserts itself in such transactions—known as Foreign Military Sales—to control technology transferred in export deals.
India’s reliance on imports has led Prime Minister Narendra Modi to promote more local production of weapons under his “Make in India” initiative.
A spokesman for India’s Ministry of Defense said it had no comment on whether the ministry had received a fresh offer from BAE. The spokesman also said he couldn’t comment on whether such an offer would be discussed when President Barack Obama meets Mr. Modi on Sunday and Monday in India.
The country is already the world’s eighth-largest defense spender, with last year’s $38 billion budget forecast by consultant Avascent to rise to $50 billion by 2018.
It has a scale and growth rate that few other markets can match, and the U.S. has intensified efforts since Mr. Obama’s first visit to India in 2010 to boost exports to a market where Russia has held the largest share.
Frank Kendall, the Pentagon’s acquisition chief, was in India last week as part of an effort to advance deals ahead of Mr. Obama’s visit. Mr. Kendall also leads a Pentagon plan to develop and produce weapons jointly with India.
—Doug Cameron contributed to this article.
باختصار شديد الهند تلقت عرض من BAE لبناء مصنع هاوتزر خفيفة الوزن من طراز M777 في الهند
المحادثات بين الطرفين موجودة من 2010 لبيع 146 مدفع M777 بالإضافة لوحدات من نظام التصويب الليزري الخاص بالمدفعية لكن الصفقة تعثرت أكثر من مرة
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