Market Trends of APAC Ballistic Missile Industry
Intercontinental Segment to Witness Highest Growth During the Forecast Period
- The demand for intercontinental ballistic missiles (ICBM) is driven by factors such as high accuracy over other small, medium, and intermediate-range missiles; intercontinental-range missiles are being researched and developed by the countries in the region. The defining feature of an ICBM is its intercontinental range, capable of spanning continents and oceans. With a minimum range of 5,500 km, these missiles can travel much farther, making them a preferred choice for long-range strategic operations.
- Countries are investing significant resources towards the development of ICBMs. On this note, North Korea has been developing several ICBMs indigenously due to the imposed international defense sanctions. For instance, in October 2022, North Korea conducted its longest-range missile test over Japan. In November 2022, North Korea test-fired 22 missiles at once; one of these missiles was launched toward Ulleung Island in South Korea. Such developments are likely to fuel the growth of the ballistic missile market in the Asia-Pacific region over the forecast period.
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India is Anticipated to Dominate the Market
- India is the third-largest defense spender in the world and the second-largest in the Asia-Pacific region. In 2022, India’s defense spending was USD 81.4 billion compared to USD 76.5 billion in 2020. For FY 2022-23, the budget stands at USD 54.2 billion (excluding the component of defense pensions). The capital outlay that focuses on the modernization of the armed forces grew by 12.82%, with an allocation of USD 20.36 billion.
- India is also focused on the indigenous development of the ballistic missiles. On this note, 68% of the capital procurement was proposed to be earmarked for the domestic industry compared to 58% in FY 2021-22. For instance, in September 2022, the Defense Ministry of India signed a contract with BrahMos Aerospace for the procurement of additional dual-role capable surface-to-surface BrahMos missiles under the "Buy Indian" category for INR 1,700 crores (USD 210 million). Also, in June 2022, India tested its nuclear-capable surface-to-surface ICBM from the Dr. APJ Abdul Kalam Island. Such developments render a positive outlook for the market in focus during the forecast period.
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