NEW DELHI (Reuters) - India approved on Saturday the purchase of 814 mounted gun systems for the army at a cost of 157.5 billion rupees ($2.55 billion), a defence ministry spokesman said.
India, already the world's largest arms importer, is in the midst of a $100 billion defence upgrade. In October, the new government approved long-delayed projects worth $13 billion to modernise hardware and boost the domestic defence industry.
In June, the government cleared defence deals worth $3.5 billion.
"The Defence Acquisition Council (DAC) today cleared the acquisition of 155 mm/52 calibre mounted gun systems worth 157.5 billion rupees," a defence ministry spokesman told reporters after the meeting, chaired by newly appointed defence minister Manohar Parrikar.
Prime Minister Narendra Modi is accelerating the modernisation plan in an attempt to catch up with neighbour China's rising military air, sea and land power. India's poorly equipped soldiers often scuffle with western neighbour Pakistan and brush up against Chinese forces patrolling a disputed Himalayan border.
Some of the mounted guns will be imported, but most will be made in India in a collaborative effort between foreign companies and domestic manufacturers.
"The initial 100 guns would be imported, but the remaining 714 would have to be produced in India," the official said.
According to local media reports, Tata Power's Strategic Engineering Division unveiled its first mounted gun system on a Tata track in 2012. Other Indian competitors could be Mahindra Defence, L&T (NS:LART) and Bharat Forge (NS:BFRG) .
Parrikar also announced that the DAC would meet more frequently, at least once in a month, to expedite acquisition proposals, the official said.
(1 US dollar = 61.7625 Indian rupee)
(Reporting by Nigam Prusty, writing by Manoj Kumar; editing by Susan Thomas)