India and the US are likely to sign an agreement for the purchase of 145 American Ultra-Light Howitzers, worth about Rs5,000 crore, with the defence ministry clearing the proposal for purchase of M777 guns for the Army.
The proposal will now be sent to the finance ministry before being put up before the Cabinet Committee on Security.
Once the process is over and the agreement signed, it would be the first deal for artillery guns since the Bofors scandal in 1980s.
The guns have a strike range of 25 kms and these are expected to be deployed in high altitude areas in Arunachal Pradesh and Ladakh, bordering China.
Sources said the ministry has shortened the supply period of the guns, though the exact period could not be ascertained.
India had sent a Letter of Request to the US government showing interest in buying the guns and the US had is reported to have responded with a Letter of Acceptance (LOA) and the ministry had in June looked into the terms and conditions before approving it.
As per the offsets, BAE Systems, manufacturer of the gun, will invest about $200 million to assemble the guns in India. While 25 guns will come to India in ready-to-fire condition, the rest will be assembled at the proposed Assembly Integration and Test facility in India in partnership with Mahindra.
The defence ministry also approved buying of over nearly 4,900 radio sets for the Army's Armoured Corps from an Israeli firm.