New Delhi, Dec 1 (IANS): United States Ambassador to India Richard Verma on Thursday called the M777 artillery deal as a major step forward in the US-India defence relationship.

"As major defence partners, the United States and India remain committed to enhancing military modernisation efforts and building a security partnership based on trust, transparency and shared interests," Ambassador Verma said in a statement on the M777 agreement.

"Indian industry will partner with the US defence subsidiary of BAE Systems to locally assemble, integrate and test the howitzers, supporting Prime Minister Modi's Make-in-India campaign," he said.

Out of 145 guns, BAE will deliver 25 guns and the rest 120 will be assembled in India by Mahindra.

India on Wednesday signed Letter of Agreement and Acceptance (LOA) with the US to purchase 145 M777 ultra-light artillery guns through the foreign military sale (FMS) route.

The 155mm/39 calibre gun, with maximum range of 30 km, is manufactured by the BAE Systems and can be transported through helicopter or aircraft. 

The ultra light howitzer is being purchased primarily to deploy on mountains in eastern China border. This will provide the much-needed fire power to the Indian Army in the mountains.

"This deal marks a major step forward in the US-India defence relationship and supports jobs in both our countries," Verma was quoted as saying in the statement.