After almost two decades, Swedish armaments major Bofors has re-entered the Indian market in its new avatar BAe Systems SWS Defence by signing an agreement with the Ordnance Factories Board to upgrade air defence guns.

This will be the second upgrade of the 40mm L-70 guns inducted by the Indian Army in the early 1960s.

The guns are currently produced by Ordnance factories under licence from the Swedish company.

Over 600 such guns are currently in the army's inventory. Though India's armed forces are increasingly opting for missile-based air defence systems, the army wants to retain gun-based systems too.

Besides upgrading the air defence guns, BAe Systems, the world's third largest defence company, is aggressively looking for manufacturing partners in India to make light, medium and heavy-calibre howitzers, naval guns, armoured combat vehicles and missile launchers.

According to a senior BAe executive, the company is in talks with major private Indian players in the defence sector, like Larsen and Toubro, Tata Power [Get Quote] and others, as it scouts for technology transfer partners.

After the upgrade, the L-70 guns will be offered by the Ordnance Factory Board to the army for trials, sources said.

Bofors was sold to US artillery giant United Technologies three years ago. It became part of the BAe consortium a year ago when the firm bought over the US gun manufacturer.

Bofors had come under a cloud following allegations that it had paid kickbacks to secure a deal for 410 howitzers in the 1980s.

The company was removed from the blacklist during the 1999 Kargil conflict, when spares were desperately needed for the guns that played a key role in the army's campaign to evict Pakistan-backed intruders.

Under the new teaming agreement, official sources said, ordnance factories will mechanically upgrade the L-70 guns while the Swedish company will provide an opto-electronic module with an integrated fire control system.

The agreement was signed by Ordnance Factory Board Chairman Sudpita Ghosh and Hakan Kangert, chairman of BAe Systems SWS Defence, in Kolkata recently.

Kangert told PTI that BAe Systems, as the orignial equipment manufacturer, is keen to upgrade the Bofors FH77B towed howitzers sold earlier to the army.

The upgraded L-70 guns, according to BAe Systems, will function as autonomous units with or without radar interface and will also have night firing capability.

"The upgraded gun is jam-proof even in the face of exteremly severe electronic-counter measures and will have the capability to match any modern air defence gun system," a BAe official said.

The upgrade will be equivalent to 20 per cent of the cost of a new gun, sources said.