By Santanu Choudhury
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 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.
Doug Cameron contributed to this article.
Write to Santanu Choudhury at santanu.choudhury@wsj.com
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