Market Trends of Ammunition Industry
This section covers the major market trends shaping the Ammunition Market according to our research experts:
The Small Caliber Ammunition Segment Accounted for the Highest Share in 2021
The small caliber ammunition segment held the largest market share in 2021. The need to maintain a sufficient inventory of ammunition with the militaries worldwide and the increasing demand for training ammunition are anticipated to have a positive impact on the military small caliber ammunition segment. In addition, several militaries have been involved in peacekeeping missions and counter-insurgency operations in foreign countries and require a continuous supply of ammunition for continuing their operations. This has been driving the growth of the segment currently. Recently, in December 2021, the Indian government placed an order for 670,000 rifles worth INR 5,124 crore (USD 681.85 million) to Russia. Initially, a lot of 70,000 AK-203 Kalashnikov assault rifles were delivered by Russia in January 2022, and the remaining 600,000 rifles are planned to be manufactured by Indo-Russia Rifles Private Limited (IRRPL), the Indo-Russian joint venture company. Militaries are increasingly moving toward higher calibers like 7.62 mm projectiles, as the existing widely used calibers like the 5.56 mm are becoming ineffective in piercing the tougher armors. Countries like the United States and India are also developing firearms based on new calibers like the 6.8 mm ammunition, which are expected to witness higher demand in the years to come. Governments are also focusing on increasing the local manufacturing capabilities of ammunition for their armed forces, which is expected to further intensify the competition between the global and local players, especially in regions like Asia-Pacific and Middle-East and Africa, during the forecast period.
The North American Region Held the Largest Market Share in 2021
The North American region held the largest market share in 2021. The United States has one of the largest armed forces in the world, with 2.26 million total military personnel, of which 1.4 million serve as active military personnel and 0.86 million serve in the reserve force. The country has the largest military spending in the world and accounts for 39% of the global spending. The US military expenditure increased by almost 4.39% in 2020 to reach USD 778.23 billion. Currently, due to the ongoing geopolitical tensions, the United States has increased its investments in advanced weapon systems and ammunition to meet the enhanced capabilities of China and Russia on the battlefield. Also, participation in NATO missions abroad generates significant demand for different types of ammunition. Currently, the US Army is planning to move away from the 5.56 mm round in its infantry weapons that have been the standard for decades. In addition to small infantry weapons, the US Army is investing in modernization of its mortar and artillery systems to keep up with the pace of technological advances for enhanced responsiveness, survivability, range, and accuracy. Such procurement plans and advanced ammunition development programs are anticipated to drive the market in the region during the forecast period.
