The US government has steeply marked up the price of the BAE System manufactured M-777 light weight howitzer on offer to India.
The US Defense SecurityCooperation Agency (DSCA) issued a legally-required notification last week to the US Congress about the possible sale of 145 M-777 howitzers to India for USD 885 million.
But what many have failed to note is that the DSCA had first issued a notification about exactly such a sale on January 22, 2010 for the amount of USD 647 million.
In purely dollar terms, the new price represents a 37 percent hike in the cost of the offer to India. But the effective increase in price for India would be even higher, going by the fall in the value of the rupee against the dollar since 2010.
This second notification by the DSCA is actually less a communication to the US Congress of intent of possible sale and more an indication of the revised price of the offer to India. What is also interesting is that the second notification lays out offset requirements on the part of the manufacturers, which was not the case in the 2010 text.