New Delhi: BAE Systems on Wednesday announced selection of Mahindra as its India partner for the nearly USD 700 million deal for the supply of 145 M777 howitzers, which are ultralight weight artillery guns having a strike range of 25 kms.


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The gun deal would be through Foreign Military Sales (FMS) but the "spares, maintenance and ammunition will be operated through Indian systems", defence sources said.


"BAE Systems has down-selected Mahindra as its business partner for the proposed in-country Assembly, Integration & Test (AIT) facility for the M777 Ultra Lightweight Howitzer," BAE said in a statement.


India and the United States are in discussion for supply of 145 M777A2 LW155 howitzers for the Indian Army, it said.


"BAE Systems looks forward to working with Mahindra in the coming weeks to finalize details of this AIT facility and to negotiate the terms of its contractual arrangement," the company said.


Last year, BAE developed and submitted a US government- supported proposal offering a higher degree of indigenisation on the M777 weapon system.


The highlight of this is the commitment to establish AIT capabilities in India in partnership with a domestic Indian company.


"The selection follows a detailed assessment of Mahindra's ability to fulfil the requirements and provide the best value to the M777 India programme, and in the future, grow its capability as a strategic partner for BAE Systems in India," it said.


Joe Senftle, Vice President and General Manager, Weapon Systems, BAE Systems said that as a founding partner of defence manufacturing in India, BAE Systems "is pleased to partner with Mahindra".


The facility is a fundamental part of the M777 production line.