Asia Pacific Ammunition Market Size & Share Analysis - Growth Trends & Forecasts (2024 - 2029)

Asia Pacific Ammunition Market Size & Share Analysis - Growth Trends & Forecasts (2024 - 2029)

The Asia-Pacific ammunition market is anticipated to grow at a CAGR of more than 3% during the forecast period.

The defense sector across the Asia-Pacific witnessed a mild impact due to the COVID-19 pandemic. South Korean government reduced its defense budget by USD 733 million in 2020 due to the pandemic. The funds were transferred to the national emergency disaster assistance plan that aims to reduce the economic impact of the pandemic.

A surge in the number of terrorist attacks in the region has triggered the procurement of weapons by regional law enforcement agencies to prevent such security lapses and the resultant loss of both lives and property. Since several weapons are configured to work with a specific caliber size, the demand for new weapons is also driving the demand for associated ammunition in this region. Furthermore, growing cross-border conflicts, political disputes among neighboring countries, and increasing terrorism across the Asia-Pacific are likely to lead to rising demands for advanced weapons and ammunition from defense forces.

Additionally, the rising demand for environment-friendly bullets to boost green ammunition and the design and development of advanced ammunition are expected to drive market growth in the coming years. The ongoing modernization of the armed forces in the region is anticipated to drive the demand for ammunition as several air, land, and naval assets feature some sort of fixed weapon station that can fire medium to large caliber bullets.

APAC Ammunition Market Trends

Military Segment is Expected to Dominate the Market During the Forecast Period

The military segment is anticipated to dominate the market during the forecast period due to the increase in procurement of ammunition by the armed forces to subdue the threats arising due to terrorism, territorial conflicts, and geopolitical tensions. The countries are procuring artillery and mortar systems to safeguard their borders against illegal trespassing and several forms of trafficking, generating demand for ammunition. Increasing defense expenditure and expansion of military forces from countries such as China and India boost the growth of the market. China and India are the world's second and third largest defense spenders, with a defense budget of USD 291 billion and USD 76.6 billion, respectively.

For instance, in October 2022, Nammo AS, a Norway-based ammunition manufacturer, entered into an agreement with South Korea's Hyundai Rotem to develop new 120 mm ammunition for the K2 Black Panther main battle tank (MBT). Furthermore, the Indian Ministry of Defence (MoD) is planning to procure air-defense (AD) guns for the Indian Army. The Indian MoD issued a request for proposal (RFP) that includes the acquisition of 220 towed AD guns and nearly 142,000 rounds of ammunition. Thus, growing expenditure on the strengthening of military forces and procurement of advanced weapons drive market growth across the region.

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 the procurement of 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 it has a service life of a minimum of 10 years or 5,000 rounds. The total cost of the procurement is more than Rs 450 crore. In addition to that, India and Japan have been investing significantly in modernizing its armory to counter the growing influence of China over the South China Sea. Thus, rising investment in the procurement of next-generation rifles and ammunition drives the growth of the market across the region.

APAC Ammunition Industry Overview

The Asia-Pacific ammunition market is moderately fragmented, with several players with significant market shares in the region. Some of the major players in the market are Rheinmetall AG, BAE Systems PLC, Nexter Group, Poongson Corporation, and Hanwha Corporation. The companies are currently focusing on designing and developing advanced ammunition for defense forces. In August 2022, the Indian Navy received the first-ever fully made-in-India 30 mm ammunition. Economic Explosives Ltd developed the ammunition, which is expected to be used in the AK-630 guns fitted on warships. Also, countries like China, India, South Korea, Singapore, and Indonesia are supporting local manufacturing companies to facilitate the need of their respective armed forces and law enforcement agencies, driving the growth of the market studied.

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