APAC Defense Market Size & Share Analysis - Growth Trends & Forecasts (2024 - 2029)

The Asia-Pacific Defence Market is Segmented by Armed Forces (Air Force, Army, and Navy), Type (Personnel Training and Protection, Communication Systems, Weapons and Ammunition, and Vehicles), and Geography (China, India, Japan, South Korea, Australia, and the Rest of Asia-Pacific). The market size and forecasts are provided in terms of value (USD Billion) for all the above segments.

APAC Defense Market Size

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APAC Defense Market Summary
Study Period 2019 - 2029
Base Year For Estimation 2023
Forecast Data Period 2024 - 2029
Historical Data Period 2019 - 2022
CAGR > 4.00 %
Market Concentration Low

Major Players

APAC Defense Market Major Players

*Disclaimer: Major Players sorted in no particular order

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APAC Defense Market Analysis

The Asia-Pacific defense market is anticipated to register a CAGR of over 4% during the forecast period.

  • Due to Covid-19, the countries in the Asia Pacific region were severely impacted economically and faced supply chain disruptions. The investments made by the countries in the region towards procuring and developing new technologies created a negligible impact of COVID-19 on the defense market and remained unaffected. 
  • A progressive and strategic increase in the defense budget and the launch of infantry support projects are expected to create demand for sophisticated new-generation weapon systems with advanced capabilities, thereby driving the market in focus during the forecast period.
  • The global military expenditure surpassed USD 2 trillion for the first time in 2021. China and India were the second and third largest defense spenders, with a defense budget of USD 293 billion and USD 76.6 billion, respectively. Due to the expansion of the defense industries in East Asian countries, including Japan, South Korea, Taiwan, and Singapore, as well as China and India, defense budgets may continue to rise. 
  • Spending on the military in the region increased by more than 3.5%, surpassing that of Europe, Africa, and the Americas. The increasing geopolitical conflicts and border tension of neighboring countries in the region are fueling the rise in military expenditure of various countries in the region. This increase in military expenditure is propelling investments into the procurement of new land, air, and sea platforms. 
  • Various government initiatives were taken to support the indigenous manufacturing of defense electronics in countries like China, India, and Japan, bolstering local manufacturing growth.

APAC Defense Market Trends

Air Force Segment is Anticipated to Register the Highest Market Share During the Forecast Period

  • The air force segment currently has the highest market share in the Asia-Pacific defense market. The countries such as China and India are heavily investing in the procurement of new aircraft, unmanned aerial vehicles (UAVs), and the required training and simulation, missiles, and ammunition. This rapid procurement strengthens air superiority and modernizes the region's military equipment. With territorial issues and political issues acting as major drivers in the market, the demand for UAVs and patrol aircraft is increasing for intelligence, surveillance, and reconnaissance missions. 
  • Countries such as New Zealand, the Philippines, South Korea, Thailand, and India, have placed orders for new maritime patrol aircraft during the past few years. According to an Asian military review, in terms of operational fleet, the region has the largest fleet of aircraft and rotorcraft, with 14,529 aircraft. Out of these, combat aircraft constitute about 4,998, along with 520 special purpose aircraft, 46 tankers, 1,008 transport, and 3,079 training and helicopters. 
  • The demand for the air force in the region is also being fueled by the military modernization program of most Asian nations to replace their outdated fighter aircraft with newer generation aircraft to enhance their aerial combat capabilities.
APAC Defense Market: Defense Expenditure, Asia Pacific, By Country, 2021, (USD Billion)

India is Expected to Witness the Highest Growth during the Forecast Period

  • India is estimated to show significant growth in the market during the forecast period. The growth is attributed to the rising defense expenditure, growing terrorism, and cross-border conflicts among neighboring countries, such as China and Pakistan.
  • The country is focusing on procuring new advanced weapons with enhanced lethality, driving the demand for ammunition in India. Growing terrorist activities and increased tensions between India and China along the Line of Control (LOC) are leading to growing expenditure on the defense sector and strengthening defense capabilities.
  • For instance, in June 2022, the Defence Procurement Board (DPB) of India issued a request for information (RFI) for the procurement of 4,800 new sniper rifles with telescopic sight and 78 lakh rounds of ammunition to provide a massive boost to the Indian Army's firepower capabilities. The new .338 caliber rifles should have an effective range of not less than 1,200 meters and a minimum service life of 10 years or 5,000 rounds. The total cost of the procurement is more than USD 54.82 million.
  • In addition, India and Japan have been investing significantly in modernizing their armory to counter China's growing influence over the South China Sea. Thus, rising investment in procuring next-generation rifles and ammunition drives the market's growth across the region.
APAC Defense Market: Military Expenditure, India, (2018-2021), (USD Billion)

APAC Defense Industry Overview

The Asia-Pacific defense market is highly fragmented, with the presence of many suppliers who provide various types of equipment, like training systems, C4ISR systems, smart weapons, unmanned systems, and missile defense systems. Some prominent players in the market are Lockheed Martin Corporation, Boeing Company, Aviation Industry Corporation of China, General Dynamics Corporation, and BAE Systems plc.

Most of the arms and ammunition are imported from the United States and Russia, and some smaller countries import from China. However, the indigenous manufacturing of arms and ammunition in countries like China, India, and Japan is picking up pace, which is anticipated to support the local manufacturing companies' growth in the region.

The Aviation Industry Corporation of China, China Aerospace Science and Technology Corporation, and China Shipbuilding Industry Corporation are some of China's major state-owned defense companies that play a major role in the China defense market. Also, through the "Make in India" initiative, the Indian government aims to procure 70% of requirements from domestic firms, up from the current 40%. Such initiatives are anticipated to support domestic players.

APAC Defense Market Leaders

  1. Lockheed Martin Corporation

  2. The Boeing Company

  3. Aviation Industry Corporation of China

  4. General Dynamics Corporation

  5. BAE Systems plc

*Disclaimer: Major Players sorted in no particular order

APAC Defense Market Concentration
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APAC Defense Market News

  • May 2022: The government of Australia announced that it would acquire 12 new MH-60R Romeo maritime helicopters and 29 AH-64E Apache Armed Reconnaissance helicopters for its army and navy. The aircraft deliveries will start in 2025 and will cost a combined total of more than AUD 8 billion (USD 5.5 billion)
  • March 2022: Through the Indian government's initiative of Aatmanirbhar Bharat Abhiyan, the Ministry of Defense identified 18 major platforms for design and development under the local defense industry's various routes. The platforms include naval ship-borne unmanned aerial systems (NSUASs), unmanned autonomous artificial intelligence (AI)-based land robots, and long-range unmanned aerial vehicles (UAVs).

APAC Defense Market Report - Table of Contents

  1. 1. INTRODUCTION

    1. 1.1 Study Assumptions

    2. 1.2 Scope of the Study

  2. 2. RESEARCH METHODOLOGY

  3. 3. EXECUTIVE SUMMARY

  4. 4. MARKET DYNAMICS

    1. 4.1 Market Overview

    2. 4.2 Market Drivers

    3. 4.3 Market Restraints

    4. 4.4 Porter's Five Forces Analysis

      1. 4.4.1 Threat of New Entrants

      2. 4.4.2 Bargaining Power of Buyers/Consumers

      3. 4.4.3 Bargaining Power of Suppliers

      4. 4.4.4 Threat of Substitute Products

      5. 4.4.5 Intensity of Competitive Rivalry

  5. 5. MARKET SEGMENTATION

    1. 5.1 Armed Forces

      1. 5.1.1 Air Force

      2. 5.1.2 Army

      3. 5.1.3 Navy

    2. 5.2 Type

      1. 5.2.1 Personnel Training and Protection

        1. 5.2.1.1 Training and Simulations

        2. 5.2.1.2 Protection Equipment

      2. 5.2.2 Communication Systems

      3. 5.2.3 Vehicles

        1. 5.2.3.1 Land-based Vehicles

        2. 5.2.3.2 Sea-based Vehicles

        3. 5.2.3.3 Air-based Vehicles

      4. 5.2.4 Weapons and Ammunition

        1. 5.2.4.1 Artillery and Mortar Systems

        2. 5.2.4.2 Infantry Weapons

        3. 5.2.4.3 Missiles and Missile Defense System

        4. 5.2.4.4 Ammunition

    3. 5.3 Geography

      1. 5.3.1 China

      2. 5.3.2 India

      3. 5.3.3 Japan

      4. 5.3.4 South Korea

      5. 5.3.5 Australia

      6. 5.3.6 Rest of Asia-Pacific

  6. 6. COMPETITIVE LANDSCAPE

    1. 6.1 Vendor Market Share

    2. 6.2 Company Profiles

      1. 6.2.1 Lockheed Martin Corporation

      2. 6.2.2 The Boeing Company

      3. 6.2.3 Raytheon Technologies Corporation

      4. 6.2.4 General Dynamics Corporation

      5. 6.2.5 Northrop Grumann Corporation

      6. 6.2.6 L3Harris Technologies Inc.

      7. 6.2.7 BAE Systems plc

      8. 6.2.8 Honeywell International Inc.

      9. 6.2.9 Aviation Industry Corporation of China

      10. 6.2.10 Rostec

      11. 6.2.11 Israel Aerospace Industries

      12. 6.2.12 Elbit Systems Ltd

  7. 7. MARKET OPPORTUNITIES AND FUTURE TRENDS

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APAC Defense Industry Segmentation

The Asia-Pacific defense market covers all aspects of the military vehicle, armament, and other equipment procurements, as well as the upgrade and modernization plans. It also provides insights into the budget allocation and spending of the various countries in the region in the past and present, as well as during the forecast period.

The Asia-Pacific defense market is segmented by armed force, type, and country. By armed force, the market is segmented into the air force, army, and navy. By type, the market is divided into personnel training and protection, communication systems, weapons and ammunition, and vehicles. By geography, the market is segmented into China, India, Japan, South Korea, Australia, and the Rest of Asia-Pacific. 

The market sizing and forecasts have been provided in value (USD billion) for all the above segments.

Armed Forces
Air Force
Army
Navy
Type
Personnel Training and Protection
Training and Simulations
Protection Equipment
Communication Systems
Vehicles
Land-based Vehicles
Sea-based Vehicles
Air-based Vehicles
Weapons and Ammunition
Artillery and Mortar Systems
Infantry Weapons
Missiles and Missile Defense System
Ammunition
Geography
China
India
Japan
South Korea
Australia
Rest of Asia-Pacific
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APAC Defense Market Research FAQs

The APAC Defense Market is projected to register a CAGR of greater than 4% during the forecast period (2024-2029)

Lockheed Martin Corporation, The Boeing Company, Aviation Industry Corporation of China, General Dynamics Corporation and BAE Systems plc are the major companies operating in the APAC Defense Market.

The report covers the APAC Defense Market historical market size for years: 2019, 2020, 2021, 2022 and 2023. The report also forecasts the APAC Defense Market size for years: 2024, 2025, 2026, 2027, 2028 and 2029.

APAC Defence Technology Industry Report

Statistics for the 2024 APAC Defence Technology market share, size and revenue growth rate, created by Mordor Intelligence™ Industry Reports. APAC Defence Technology analysis includes a market forecast outlook to 2029 and historical overview. Get a sample of this industry analysis as a free report PDF download.

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APAC Defense Market Size & Share Analysis - Growth Trends & Forecasts (2024 - 2029)