The serious business of war: India, China reshape global defence trade

In a fast-expanding global arms market, India has emerged as largest importer even as it develops an indigenous defence sector. Meanwhile, China has emerged as the biggest challenger to US hegemony

A marked surge in global arms transfers between 2011 and 2024, compared to the 2000–10 period, has been highlighted in a new analysis of international arms import-export data by the Stockholm International Peace Research Institute (Sipri), a leading authority on global security. According to Sipri’s data, the United States (US) continues to dominate the global arms market, posting $316.75 billion in arms revenue in 2023 — more than three times the total of second-ranked China. In a notable shift, China, despite being a major military force, reduced its arms imports by 47 per cent, signalling growing domestic capabilities and an increasingly self-reliant defence sector. 

Retired Lt Gen Vinod G Khandare attributes the rise in global arms transfers since 2000 to China’s manufacturing boom, which has provided an alternative to countries previously reliant on the US, boosting Chinese arms sales in Southeast Asia and reducing the market share of European producers. “China targets nations with weapons appetite, providing ‘quid pro quo deals’ that differ from the American model,” he says.

  Retired Lt Gen V K Chaturvedi describes the contest between the US and China as one of intense rivalry, underpinned by an “ideological clash” between American visions of a unipolar world and Chinese push for multipolarity. He maintains that the US retains a lead in advanced defence sectors, including avionics, surveillance, and space technology, but warns that China “does not mind adopting unethical means also in arms deals and to deliberately destabilise regions for strategic gain.”

  India leads in imports, China looks inwards

  The Asia and Oceania region remains pivotal in the global arms trade. India leads as the world’s top arms importer, doubling its imports (up 104 per cent) and accounting for 27 per cent of the region’s total. Australia also saw a sharp 90 per cent rise.

Lt Gen Khandare points to China’s expanding naval capabilities as a challenge to US maritime dominance. He notes a strategic shift in Beijing’s defence structure, including transitioning army personnel to the navy and using global anti-piracy operations to gain naval experience and build operational proficiency. 

  India, meanwhile, is actively diversifying its suppliers beyond traditional partner Russia. Major acquisitions now include the S-400 missile system from Russia, Rafale jets from France, and Chinook helicopters from the US. There are also domestic production tie-ups, such as the Airbus-Tata venture. Lt Gen Chaturvedi highlights India’s growing focus on self-reliance, with increasing production of missiles, artillery, ammunition, tanks, aircraft, and naval vessels. While the “Make in India” push is yielding results, Lt Gen Khandare notes that complete self-sufficiency remains elusive due to constraints in technological know-how and access to raw materials.

  South Asia's arms race

  South Asia, in line with global patterns, has seen a sharp rise in arms imports. India and Pakistan remain the two most prominent buyers, with Pakistan showing a significant 74 per cent increase. Lt Gen Khandare acknowledges Pakistan’s defence sector progress, highlighting “remarkable growth from having no ordnance factories at Independence to establishing 14 such facilities”. 

  “While Pakistan has achieved success in assembling platforms like the JF-17 (with Chinese technology transfer), it still faces significant challenges in developing and producing advanced technologies, particularly in critical areas like aircraft engines,” he says. “Their domestic industry is vibrant but needs improvement in producing cutting-edge products.”

Bangladesh and Afghanistan also registered high percentage increases, while Sri Lanka reported a sharp fall, likely linked to the end of its civil conflict.  Lt Gen Khandare underscores a broader shift in South Asia: “The trend in arms acquisition has evolved from merely seeking technology transfer to actively pursuing joint ventures, aiming for greater self-sufficiency and cutting-edge capabilities.”

  New epicentre of arms imports

  West Asia has emerged as the largest importer of arms globally, with a 164 per cent increase driven by intensifying regional conflicts and efforts to modernise military capabilities. “West Asia’s emergence as a major arms importer is attributed to its purchasing power and a belief in acquiring power through arms,” explains Lt Gen Khandare. 

The Sipri data points to a broader global trend. Africa saw its imports double (up 100 per cent), while Asia and Oceania registered a 52 per cent increase, maintaining their status as leading importers. European imports rose 29 per cent, with the spike in recent years (2022–24) largely attributed to the war in Ukraine. Particularly striking was the 189 per cent surge in arms imports by international organisations, such as the North Atlantic Treaty Organization (Nato), which appears to reflect stepped-up collective defence postures. 

Within Europe, countries including the United Kingdom, Norway, Poland, and the Netherlands all recorded notable increases in arms imports, a pattern heavily influenced by Russia’s aggression in Ukraine. 

Global arms industry: Continued dominance and emerging contenders 

The global arms industry remains in flux, shaped by geopolitical tensions and ongoing conflicts. The US continues to lead, with defence giants Lockheed Martin and RTX maintaining top spots despite occasional setbacks. 

China, with combined revenues of $102.89 billion in 2023, has secured second place, although its growth has slowed, suggesting a shift in strategy towards more sophisticated, high-tech production. Lt Gen Chaturvedi remains critical, citing ongoing issues with quality and technological depth in Chinese firms such as Norinco, especially in areas like surveillance radar and air defence systems. He also raises concerns about China offloading inferior, ageing equipment onto foreign buyers. 

  “Beijing deliberately fosters instability in the Indo-Pacific region, in Southeast Asia and uses projects like CPEC (China-Pakistan Economic Corridor) and BRI (Belt and Road Initiative) with ulterior motives,” he adds.

  Europe saw a marked rise in arms revenues, led by the UK ($47.68 billion), France ($25.53 billion), Italy ($15.21 billion), and Germany ($10.67 billion). The war in Ukraine has prompted Nato nations to expand defence budgets and restock arsenals, a trend that has boosted manufacturers like BAE Systems and Rheinmetall. 

Despite facing international sanctions, Russia still registered a strong $25.5 billion in arms revenues, fuelled primarily by domestic procurement related to its war effort. In West Asia, Israel ($13.60 billion) and Türkiye reported significant growth, cementing their status as regional exporters, particularly in areas such as drone technology and missile defence.

  India’s defence firms —including Hindustan Aeronautics, Bharat Electronics, and Mazagon Dock Shipbuilders — have moved up in global rankings, reflecting momentum from the “Make in India” initiative and export aspirations. While still trailing the world’s leading arms producers, Lt Gen Chaturvedi praises the joint public-private model involving groups like L&T, Tata, and Bharat Forge. India has begun exporting systems such as the BrahMos missile, but further expansion in production capacity is essential. Lt Gen Chaturvedi is optimistic that 10–12 Indian firms could feature prominently in Sipri’s listings by 2035. Lt Gen Khandare adds that Indian companies — including startups and micro, small and medium enterprises — are already making components for Western arms industries, including in the US and Israel.

  South Korea also posted strong growth, reaching $10.98 billion in arms revenues. Its rise has been powered by government investment and major deals with partners such as Poland and the United Arab Emirates.