Global Arms Industry Thrives Amid Ongoing Conflicts: US Leads with $317 Billion Sales in 2023

Global conflicts, including the wars between Ukraine and Russia, as well as Israel and Hamas, have significantly benefitted American arms manufacturers.

According to a recent report by the Stockholm International Peace Research Institute (SIPRI), in 2023, American companies produced 50% of all military equipment sold globally. These companies collectively sold weapons worth $317 billion last year.

China ranks second on the list, with its companies selling arms worth $130 billion globally in 2023. The report reveals that the world’s top 100 arms manufacturers sold $632 billion worth of military equipment in 2023, marking a 4.2% increase compared to 2022.

Due to ongoing conflicts, smaller companies in Russia and Israel recorded the most significant profit increases.

Lorenzo Scarazzato, a SIPRI researcher specialising in military expenditure and arms production, noted in the report that revenues from arms sales surged in 2023 and are expected to continue rising in 2024.

SIPRI’s list of the top 100 arms-producing companies includes two Indian firms but no Pakistani companies.

Scarazzato further explained that the reported figures do not fully capture the massive global demand for weapons. Many firms have started hiring technicians and engineers, suggesting they anticipate even greater sales in the future.

American Arms Dominance

Since 2018, five US companies have consistently topped SIPRI’s annual rankings of arms producers, with a total of 41 American firms on the 2023 list. Together, these companies sold $317 billion worth of weapons last year.

Following Russia’s invasion of Ukraine, the US Department of Defense also reported increased military equipment sales in 2023, with most sales directed toward European and allied nations. Defence analyst Rahul Bedi highlighted the high costs of modern weaponry, citing the American Javelin missile, which costs approximately ₹50 million per unit in Pakistani currency.

Bedi added that the reported revenue of $317 billion is likely an underestimate, as arms transactions often occur in a “grey area” with many undisclosed deals. The US arms industry is predominantly in private hands and is supported by a powerful lobbying system, which some experts believe heavily influences government policy.

Global Arms Market Dynamics

The top 10 arms producers include three Chinese firms, one Russian company, and one British firm. Additionally, 27 European companies collectively earned $133 billion from arms sales in 2023.

SIPRI’s report noted that the Ukraine war greatly benefitted Russian arms manufacturers, whose revenues increased by 40% to over $25 billion in 2023. Meanwhile, Chinese firms saw the lowest growth rate, at just 0.7%, due to the country’s slowing economy.

Nine Chinese companies are on the list, with a combined revenue of $103 billion in 2023. Bedi pointed out that Russia’s advanced defence technology, paired with China’s industrial capacity, has created a formidable partnership.

Israel’s three largest arms manufacturers also recorded their highest-ever sales of $13.6 billion in 2023, driven by the ongoing Gaza conflict. SIPRI senior researcher Dr Lopez da Silva expects this trend to continue, with Israeli companies receiving even more orders in 2024.

Turkey’s arms industry also grew by 24% in 2023, bolstered by NATO-provided technology and rapid advancements in defence capabilities.

India remains a minor player in the global arms trade, with its three companies generating a combined revenue of $6.07 billion in 2023.

Market Concentration

Bedi observed that just 10 countries dominate the global arms trade: the US, China, Russia, France, Germany, Italy, the UK, Israel, South Korea, and Spain. These nations account for 90% of global arms sales.

With ongoing tensions, wars, and political instability in various regions, analysts predict continued growth in the arms trade this year and beyond. The policies of newly elected US President Donald Trump are expected to influence this sector significantly, as defence experts await his administration’s stance on global security issues.