Surge in Global Arms Trade: SIPRI

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• Three Indian companies are among the world’s top 100 for combined arms sales in 2020, said a new report by the Stockholm International Peace Research Institute (SIPRI), which tracks global arms trade.

About

• Stockholm based institute: Stockholm International Peace Research Institute (SIPRI) is an international institute based in Stockholm.
• Aim: It was founded in 1966 and provides data, analysis and recommendations for armed conflict, military expenditure and arms trade as well as disarmament and arms control.
• Source: The research is based on open sources and is directed to decision-makers, researchers, media and the interested public.

Major Highlights of the report

• The three Indian companies were ranked among the top 100 in arms sales in 2019 as well.
• The three Indian companies are:
  • Hindustan Aeronautics Limited (HAL)
  • Indian Ordnance Factories, and
  • Bharat Electronics Limited (BEL)
• Ordnance Factory Board (OFB): Of these, the Ordnance Factory Board (OFB), which comprised the Indian Ordnance Factories, has been dissolved and seven new Public Sector Undertakings created in its place.
• Rankings: In the latest rankings, HAL is at number 42 with US$ 2.97 billion, up 1.5 per cent from 2019 sales.
  • Indian Ordnance Factories are at the 60th spot, with US$ 1.9 billion in sales, up 0.2 per cent from the previous year.
  • BEL is ranked 66, with US$ 1.63 billion in arms sales, up 4 per cent compared to 2019.
• Global share: However, India has the smallest share among the top 11 defence manufacturing nations.
  • USA: With 41 arms companies, the USA has the high­est number of companies in the top 100 worldwide. Together, their arms sales amounted to $285 billion, an increase of 1.9 per cent compared with 2019. US companies accounted for 54 per cent of the combined arms sales of the top 100.
  • China: China was second at 13 per cent
  • UK: 7.1 per cent is on third rank.
  • Others: Russia and France were fourth and fifth with 5 percent and 4.7 percent respectively of the combined arms sales for the top 100 companies.

Analysis

• The rise of China: as a major arms producer has been driven by its aim to become more self-reliant in weapons production and by the implementation of ambitious modernisation programmes.
  • It noted that five Chinese arms companies are ranked among the top 20, with three in the top 10.
• Indian scenario: India’s share of arms sales globally in 2020 was 1.2 percent.
  • Domestic procurement has helped to shield Indian companies against the negative economic consequences of the pandemic.
  • In 2020, the Indian Government announced a phased ban on imports of more than a hundred different types of military equipment to support domestic companies and enhance self-reliance in arms production.
  • However, India has the smallest share among the top 11 defence manufacturing nations.
• Russia: the combined arms sales of the nine Russian companies ranked in the Top 100 decreased from $28.2 billion in 2019 to $26.4 billion in 2020.
• Europe: The European arms industry has a combined 21% of the top 100’s sales on its books.
  • In 2020, the 26 European companies listed sold $109 billion worth of weapons. The four wholly German arms companies accounted for just under $9 billion of this total.
• South Korea: Four South Korean companies were included in the ranking. Their combined arms sales amounted to $6.5 billion in 2020, a year-on-year increase of 4.6 per cent.
• Japan: The aggregated arms sales of the five Japanese companies in the ranking were $9.9 billion in 2020, or 1.9 per cent of the total.
• Combined arms sales of the world: The report mentioned that the combined arms sales of the world’s largest arms-producing and mili­tary services companies were $531 billion in 2020.
  • It represents an increase of 1.3 per cent on their arms sales in 2019.
• Global arms industry flourishing despite COVID: The COVID-19 pandemic has brought about massive economic slumps around the world. One sector, however, has proved immune to the virus: the arms industry.

Source: IE