India is world's second largest arms importer. Who is number 1?
New Delhi: In a report released earlier in the year, IHS, “the leading global source of critical information and insight” concluded that in 2014 global defence trade increased for the sixth straight year to $64.4
New Delhi: In a report released earlier in the year, IHS, “the leading global source of critical information and insight” concluded that in 2014 global defence trade increased for the sixth straight year to $64.4 billion, up from $56.8 billion. “Defence trade rose by a landmark 13.4 percent over the past year,” said Ben Moores, senior defence analyst at IHS Aerospace, Defence & Security.
“This record figure has been driven by unparalleled demand from the emerging economies for military aircraft and an escalation of regional tensions in the Middle East and Asia Pacific.”
One of the key drivers of that growth is our peace loving (cough) nation of India, which was the world's second largest importer of arms in 2014. Compared to 2013, however, that may be good news (or bad news -- depending on which side of the defence debate you lie), as India held the top spot for world arms import figures in that year.
The main beneficiary of growth remains -- surprise surprise -- the United States, supplying one-third of all defence exports.
Highlights from the IHS Global Defence Trade Report:
1. Saudi Arabia topped India to become the largest defence market for US; The US supplied one-third of all exports and was the main beneficiary of growth;
2. Saudi Arabia and UAE imported more than all of Western Europe; China is now the third largest importer of defence equipment, up from fifth;
3. South Korea is the rising star of Asia Pacific exports;
4. Despite a record 2014, Russian defence exports are set to drop;
5. Saudi Arabia, Indonesia, Sweden and Nigeria are the UK's top trading partners.
One out of every seven dollars spent on defence imports will be spent by Saudi Arabia
In 2014, Saudi Arabia replaced India as the largest importer of defence equipment worldwide and took the top spot as the number one trading partner for the US.
“Growth in Saudi Arabia has been dramatic and, based on previous orders, these numbers are not going to slow down,” Moores said.
Already the largest importer of weapons, Saudi Arabian imports increased by 54 percent between 2013 and 2014 and, based on planned deliveries, imports will increase by 52 percent to $9.8 billion in 2015. One out of every seven dollars spent on defence imports in 2015 will be spent by Saudi Arabia.
$110 billion in opportunities in Middle East
“When we look at the likely export addressable opportunities at a global level for the defence industry, five of the 10 leading countries are from the Middle East,” Moores said. “The Middle East is the biggest regional market and there are $110 billion in opportunities in coming decade.”
Saudi Arabia and UAE together imported $8.6 billion in defence systems in 2014, more than the imports of Western Europe combined. The biggest beneficiary of the strong Middle Eastern market remains the US, with $8.4 billion worth of Middle Eastern exports in 2014, compared to $6 billion in 2013.
The second tier of exporters to the Middle East is led by the United Kingdom with $1.9 billion, the Russian Federation with $1.5 billion, France with $1.3 billion and Germany with $1 billion.
China and South Korea stand out in Asia Pacific
In 2014, China jumped from the world's fifth to the third largest defence importer.
“China continues to require military aerospace assistance from Russia and its total defence procurement budget will continue to rise very quickly,” said Paul Burton, Director of Defence Industry & Budgets at IHS Aerospace, Defence & Security.
IHS forecasts that fast-emerging exporter South Korea will become a regional leader in the coming decade. Some $35 billion in new contracts will come online within the next decade and the South Korean defence industry is forecast to win $6 billion in new business within East Asia. South Korea looks set to be the rising star of the Asia Pacific defence industry.
Russia had record year, but a perfect storm awaits
Russia exported $10 billion in 2014, an increase of 9 percent from 2013. China was the largest recipient of equipment ($2.3 billion) followed by India ($1.7 billion), and Venezuela and Vietnam (each $1 billion).
After years of sales growth, Russian industry exports now face challenging times. A drop off in exports is forecast for 2015 as major programs draw to a close, a trend that could be accelerated by sanctions.
Furthermore, falls in the oil price are set to have a devastating impact on some lead Russian clients who are vulnerable to low oil prices, such as Venezuela and Iran. This problem is compounded as Chinese industry becomes increasingly less dependent on Russian technology.
Disclaimer: The article was first published in 'TheCitizen'. India TV does not assume any responsibility or liability for the same.