Ammunition Market in India & Globally
The ammunition manufacturing market offers appealing and significant opportunities for both, Indian and foreign, companies, throughout the supply chain. India has the third-largest armed forces in the world. The government has taken several initiatives to encourage ‘Make in India’ activities through policy support initiatives to modernize its armed forces and reduce reliance on external defence procurement
Market Insights:
The ammunition manufacturing market was valued at INR 883.06 Bn in FY 2022, up from INR 788.20 Bn in FY 2018, expanding at a compound annual growth rate of 2.88%. The Ministry of Defence (MoD) develops defence and security policies and oversees their implementation by the armed forces (that is, the Army, the Navy, and the Air Force). The budget includes expenditures for armed forces and civilian salaries, pensions, armed forces’ modernization, production establishments, maintenance, and its research and development organizations.
Finance Minister of India presented the interim budget on 1 February 2024. The budget estimates for the Ministry of Defence (MoD) for 2024-25 are Rs 621,540.85 crore, constituting 13.04 percent of the total Union Budget. The allocations to the MoD in BE 2024-25 are an increase of 4.71 per cent from the 2023-24 budget estimates of Rs 593,537.64 crores. As a percentage of Central Government Expenditure (CGE), the average annual percentage of the defence budget since 2014-15 has been 15.6 per cent. The highest it has been in the past decade was in 2016-17, when the defence budget was 17.8 per cent of the CGE.
India’s import dependency for defence:
- India remained the world’s largest arms importer for five years between 2018-22, despite a 11% drop in arms imports between 2013-17 and 2018-22, according to SIPRI.
- Russia, once the largest arms supplier to India, experienced a decrease in its share of total Indian arms imports from 64% to 45% between 2013-2017 and 2018-22.
- For the same period, India remained the largest arms importer followed by Saudi Arabia.
- India’s imports from Russia, France, and the US accounted for 45%, 29%, and 11% respectively, while India was the third largest arms supplier to Myanmar.
India's Emergent Private Ammunition Sector: Implications for Defence and Self-Reliance:
- The Indian defence sector has traditionally been dominated by state-owned Ordnance Factory Boards (OFBs).
- The Recent years have witnessed a significant policy shift towards the liberalization and privatization of defence manufacturing.
- A landmark development in this direction has been the opening of India’s first private ammunition manufacturing facilities.
Global Market Size
The global ammunition market has been witnessing steady growth over the years. According to a report by Grand View Research, the global ammunition market size was valued at $21.7 billion in 2019 and is expected to reach $28.7 billion by 2027, with a compound annual growth rate (CAGR) of 3.9% during the forecast period.
The growth of the ammunition market can be attributed to various factors such as increasing defence budgets, rising geopolitical tensions, and the growing demand for ammunition from law enforcement agencies. Additionally, the surge in terrorist activities and ongoing military modernization programs in several countries have further fuelled the demand for ammunition.
The Global Small Caliber Ammunition Market is expected to reach USD 12.91 Billion by 2030, at a CAGR of 0.5% during the forecast period 2022 to 2030. The Small Caliber Ammunition market is anticipated to be driven by rising global hunting and sporting activities and rising military spending. Most nations have started expanding their military capabilities to combat terrorism and protect their borders from escalating geopolitical rivalry. Additionally, several nations are concentrating on strengthening their law enforcement organizations to manage domestic problems. These tendencies are anticipated to fuel the demand for weapons and ammunition, supporting the Small Caliber Ammunition market’s expansion.
