Breaking the Bofors jinx, India and the US inked a nearly Rs 5,000 crore deal on Wednesday for 145 M777 ultra-light howitzers, which will be mostly deployed near the borders with China.
This is the first deal for artillery guns since the Bofors scandal in 1980s.
"India has today signed the Letter of Acceptance which formalises the contract between India and US for these guns," sources said.
The deal, costing about Rs 5,000 crore, was recently cleared by the Cabinet Committee on Security (CCS).
The deal was inked at a two-day meeting of the 15th India-US Military Cooperation Group (MCG).
India-US MCG is a forum established to progress Defence Cooperation between HQ Integrated Defence Staff and US Pacific Command at the strategic and operational levels.
The meeting commenced with the US Co-Chair Lt Gen David H Berger, Commander US Marine Corps Forces, Pacific calling on Lt Gen Satish Dua, CISC, HQ IDS.
The MCG meeting is co-chaired by Air Marshal AS Bhonsle DCIDS (Operations), HQ IDS.
A 260-member delegation from the US Defence Forces and several officers from the three Services HQ and HQ IDS representing the Indian side are attending the bilateral event.
On the issue of M777, the sources said India had sent a Letter of Request to the US government showing interest in buying the guns which will be deployed in high-altitude areas in Arunachal Pradesh and Ladakh, bordering China.
The US had responded with a Letter of Acceptance (LOA) and the Defence ministry had in June looked into the terms and conditions and approved it. The offsets, under which BAE Systems, manufacturer of the gun, will invest about 200 million dollar, will be pursued independently.
While 25 guns will come to India in a fly-away condition, the rest will be assembled at the proposed Assembly Integration and Test facility for the weapon system in India in partnership with Mahindra.
The first two howitzers will be delivered within six months of the contract being inked, while rest will be delivered at the rate of two per month. The howitzers that can be heli-lifted were first proposed?to be bought from BAE about 10 years back.