August 30, 2017:
While India has already made arrangements to build British developed M777 155mm howitzers it still has an Indian firm seeking to build a new one based on the Swedish Bofors howitzers that were imported in the 1980s. The Indian version, called Dhanush is a towed 155mm howitzer with a longer barrel (and longer range) than the Bofors design. Three prototypes were turned over to the army for tests in July and failed. The Indian OFB (Ordnance Factories Board) built the prototypes and has a contract for producing 114 of them with the first 18 to be delivered by the end of 2017. But that only happens of the Dhanush passes acceptance tests by the army and it is common for OFB built weapons and ammunition to fail, often repeatedly.
The state owned Ordnance Factories Board has long had for producing weapons ammunition. In 2016 that began to change. There are several sound reasons for the change. Civilian firms have long demonstrated that weapons and ammo can be made cheaper, of higher quality and faster if state owned manufacturing is not involved. But the OFB has more powerful allies in the government than any foreign supplier, no matter how superior their product may be.
The OFB began in 1775 as part of the British East India Company (which colonized, unified and industrialized India) which sought to create a local source of gunpowder and other munitions while also controlling who had access to it. When British India became independent in 1947 it inherited the OFB, along with a nationwide bureaucracy, a common language (English) for government and commerce and a preference for socialism (in the form of state controlled monopolies). Britain got rid of its state owned firms in the 1980s and India, for much the same reasons, followed suit in the 1990s. But there was one major difference in India and that was the long established use of government jobs as a form of patronage (to help get elected). This exists in many other democracies but India had a particularly nasty addiction to this sort of thing. Thus Indian primary education is still a shambles (because teaching jobs often go to incompetent or non-existent people) and state owned defense industries were perpetually overstaffed and inefficient.
The OFB is knew it was facing local competition for building 155mm howitzers. In 2016 an Indian firm (Mahindra) and BAE (a major British arms manufacturer) agreed to jointly produce 145 M777 howitzers for the Indian Army. It was only in mid-2015 that India and BAE finally settled all their contract differences and confirmed the M777 sale. One of the conditions was BAE finding an Indian firm to assemble the howitzers in India. The Mahindra M777 facility will begin production in late 2018 and will probably get their M777 howitzers to the Indian army before the OFB delivers usable Dhanush howitzers.
India first approached BAE about buying the M777 in early 2010. Selling weapons to India is a very complicated process, made more complex since 2006 because of an escalating Indian crackdown in corruption in weapons procurement. Thus Indian procurement bureaucrats became even more troublesome and obstinate than usual. The M777 deal was almost completed in 2013 but more problems kept showing up. The army was determined to get these howitzers and made a major effort to deal with the obstacles. This sale went through the BAE American subsidiary, which because of its size, ownership and track record basically operates as an American defense firm.
With this purchase India was joining the United States, Canada and Australia in using the M777 towed 155mm howitzer. India is buying the lightweight (3.4 ton) M777 howitzers for about $5 million each. India is particularly attracted by the fact that the M777 can be moved slung under a helicopter, and thus quickly moved to inaccessible areas near the Pakistani and Chinese borders.
The M777 is a British design and, at four tons (for the standard version), is the lightest 155mm towed howitzer ever fielded. M777 fire control is handled by computerized system that allows faster response time and more accurate shooting. The M777 can use all current 155mm ammunition, including the Swedish/American Excalibur GPS guided shell. The guided round cuts ammo use enormously. India already uses a similar Russian guided shell called Krasnopol. The helicopter is the preferred method of moving the M777 across rough terrain. An M777 on a mountain top, with a few dozen Excalibur or Krasnopol rounds, provides precision fire support for troops within a 30-40 kilometer radius. Indian land borders are largely mountainous, and difficult to reach by land routes, especially for artillery that could not be flown in. The M-777 changes that.
The M777 is also the first new artillery for the Indian Army since the late 1980s. Currently most Indian artillery is either obsolete or soon to be. All these guns are also quite worn and less reliable as a result. Decades of pleas to parliament to speed up acquisition of new weapons. Until 2010 nothing much happened, but since then public pressure and the rapidly deteriorating (and publicized) state of Indian artillery led to some action.
The Dhanush howitzer is apparently inferior in every way to the M777, but the Dhanush is of more value to the Indian procurement bureaucracy and that counts for a lot even in the 21st century.