India has delayed a final decision on purchasing 145 M777 howitzers from the US subsidiary of BAE Systems. According to Defense News, the problem is over issues stemming from offset obligations.
India’s Defense Acquisition Council — which operates within the Ministry of Defense — said the deal hasn’t taken place because BAE Systems wanted six years, rather than four, to fulfill its offset obligations. As Defense News points out, Indian law dictates that defense contractors discharge offsets up to 30 percent of the value of the signed contract.
Meanwhile, the program now costs $885 million due to inflation, rather than $493 million when it was approved in 2010.
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