| Study Period | 2019 - 2030 |
| Market Size (2025) | USD 536.67 Billion |
| Market Size (2030) | USD 644.20 Billion |
| CAGR (2025 - 2030) | 3.72 % |
| Fastest Growing Market | Asia Pacific |
| Largest Market | North America |
| Market Concentration | Low |
Major Players
*Disclaimer: Major Players sorted in no particular order |
APAC Defense Market Analysis
The APAC Defense Market size is estimated at USD 536.67 billion in 2025, and is expected to reach USD 644.20 billion by 2030, at a CAGR of 3.72% during the forecast period (2025-2030).
The APAC defense market growth is driven by increased defense budgets, modernization programs, and strategic initiatives to enhance national security. Notable markets include China, India, Japan, and South Korea, each contributing significantly to the overall market expansion.
In the Asia-Pacific region, defense strategies are being revolutionized by adopting cutting-edge technologies such as artificial intelligence, cybersecurity, unmanned systems, and hypersonic weapons. For instance, using AI in combat, including autonomous drones and systems for decision support, increases the effectiveness of operations and tactical decisions.
In terms of cybersecurity, critical defense infrastructures are adequately protected from cyber threats to ensure data integrity and, by extension, operational continuity. Unmanned systems, from UAVs to UUVs, offer further augmented situational awareness and force multiplication capacities in surveillance and combat roles. Since they can move at speeds greater than Mach 5, hypersonic weapons provide gravitas to strategic superiority manifested in rapid response and penetration of sophisticated defense systems.
Further, defense spending is driven by continual regional security threats, which include territorial disputes and military provocations. Countries pursue active military capability through modernization to protect sovereignty and maintain regional stability. Some APAC countries ' economic fluctuations and budgetary constraints can constrain defense spending and curtail procurement plans and modernization efforts.
Economic downturns or a reallocation of funds to other critical sectors, such as healthcare and infrastructure development, can retard market growth. At the same time, political instability, regulatory challenges, and bureaucratic inefficiencies further this scenario by delaying defense projects and processes of acquisition. This makes it challenging to acquire the needed systems in a timely manner to implement defense strategies, further affecting the overall market dynamics. In turn, the interaction of economic pressures and political barriers imposes intensive challenges on the region for consistently advancing defense capabilities.
APAC Defense Market Trends
Air Force Segment to Dominate Market Share During the Forecast Period
Air forces in the region are acquiring new fleets under large modernization programs. Countries like India, China, and Japan have ordered new fleets of advanced fifth-generation fighters like the F-35 and Su-57 and are developing their aircraft.
Air force capabilities are being enhanced due to increased geopolitical tensions in the South China Sea, the Taiwan Strait, and the Indo-Pacific region. The threat of conflict in this region has increased the demand for high-class air power with responsive strategic maneuvers. The integration of next-generation aircraft or advanced aircraft, surveillance, and missile defense systems has to be made to ensure a strategic advantage.
A major growth-driving factor in aerial defense operations is the introduction of advanced technologies like stealth, hypersonics, and artificial intelligence. APAC air forces invest in next-generation technologies to enhance operational efficiency and survivability. For example, Japan's F-X program aims to develop a sixth-generation fighter aircraft embedded with advanced AI and stealth capabilities.
On the other hand, countries like India and South Korea are focusing on the indigenous development of air force assets. This includes fighter aircraft like the HAL Tejas of India and the South Korean KF-21 Boramae, which is an attempt to break free from dependence on foreign suppliers and promote self-reliance in defense technology. Considerable government support and funding for programs like these drive the segment growth.
For instance, in December 2023, South Korea signed a contract with Lockheed Martin to procure 20 F-35A stealth fighter jets. This agreement aims to enhance South Korea's defense capabilities against North Korean threats. The F-35A jets, known for their advanced radar and stealth features, will be delivered in 2027.
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India is Expected is Projected to Witness Highest Growth During the Forecast Period
The Government of India has significantly enhanced its defense budget to modernize its military capabilities. Approximately USD 72.6 billion was set aside for defense in FY 2024-25. This is an increase of 13% over the previous year, reflecting strong interest in boosting the national security infrastructure.
India is going through a significant modernization program for the military, which envisions the replacement of aging equipment with up-to-date technology. These include advanced aircraft, naval vessels, and missile systems, backed by 'Make in India' initiatives to increase domestic manufacturing. The Indian government has undertaken large defense procurement programs to strengthen its defense. Significant acquisitions in recent times are the French fighter aircraft Rafale, the Russian air defense system S-400, and the indigenous development of Tejas Light Combat Aircraft. These procurements are part of India's broader strategy to diversify its defense suppliers and enhance its technological edge.
The Indian government, with the initiative of "Atmanirbhar Bharat," or self-reliant India, envisages a significant reduction of dependence on imports for defense. India supports domestic defense manufacturing by encouraging indigenous production of defense equipment, such as through the Defense Production and Export Promotion Policy (DPEPP) 2020. In this way, the policy for the growth of a robust defense industrial base supports sustainable development in the sector. India has continuously worked towards strategic defense collaboration with major world powers. This includes technology transfer, joint venture arrangements, and co-development in defense systems with the US, Russia, France, and Israel. These collaborations are critical to integrate India's defense capabilities and secure access to state-of-the-art technologies. India's defense expenditure is also based on its relatively stable economic growth.
For instance, in March 2024, the Indian Ministry of Defence contracted five crucial, irrevocable contracts worth USD 4.69 billion to implement the Aatmanirbharta in Defence and Make-in-India programs to enhance domestic capabilities and reduce dependency on foreign sources. The contracts include the procurement of RD-33 aero engines for MiG-29s from Hindustan Aeronautics Ltd, Close-in Weapon Systems, and High Power Radars from Larsen & Toubro Ltd and BrahMos Missiles & Shipborne BrahMos systems from BrahMos Aerospace Pvt. Ltd –aimed to enhance significantly the operational capabilities of the Indian Military, growth in domestic industries, and the creation of large-scale employment.
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APAC Defense Industry Overview
The Asia-Pacific defense market is fragmented, with many suppliers providing various types of equipment, such as training systems, C4ISR systems, smart weapons, unmanned systems, and missile defense systems. Some prominent players in the market are Lockheed Martin Corporation, Boeing Company, Aviation Industry Corporation of China, General Dynamics Corporation, and BAE Systems plc.
Most arms and ammunition are imported from the US and Russia, and some smaller countries import from China. However, the indigenous manufacturing of arms and ammunition in countries like China, India, and Japan is picking up pace, which is anticipated to support the growth of local manufacturing companies in the region.
The Aviation Industry Corporation of China, China Aerospace Science and Technology Corporation, and China Shipbuilding Industry Corporation are some of China's major state-owned defense companies that play a significant role in the Chinese defense market. Also, through the "Make in India" initiative, the Indian government aims to procure 70% of requirements from domestic firms, up from the current 40%. Such initiatives are anticipated to support domestic players.
APAC Defense Market Leaders
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Lockheed Martin Corporation
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The Boeing Company
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Aviation Industry Corporation of China
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General Dynamics Corporation
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BAE Systems plc
- *Disclaimer: Major Players sorted in no particular order
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APAC Defense Market News
- May 2024: Japan and the US signed a formal agreement on jointly developing the Glide Phase Interceptor (GPI) system to counter hypersonic weapons. Japan will manufacture the rocket engines and other propulsion subsystems and is working on a contract with Mitsubishi Heavy Industries for the development of the systems. The agreement focuses on balanced work-sharing, potentially reaching 50% each between Japan and the US. This will strengthen the defense industry's capability in the region.
- May 2024: Craig International Ballistics secured a USD 19.82 million contract to supply the Australian Defence Force with advanced body armor to protect against low- and high-velocity projectiles and fragmentation. The protective suits will be distributed among troops engaged in combat and counter-terrorism operations. This contract aligns with government initiatives to bolster small and medium-sized enterprises and sustain local employment within Australia.
- April 2024: Lockheed Martin Australia secured a significant USD 330.29 million contract with the Department of Defence to establish Australia's future Joint Air Battle Management System (JABMS) under project AIR6500 Phase 1 (AIR6500-1). The initiative aims to advance Australia's air and missile defense capabilities by incorporating cutting-edge technologies to neutralize high-speed aerial threats.
APAC Defense Industry Segmentation
The Asia-Pacific defense market covers all aspects of military vehicle, armament, and other equipment procurements and upgrade and modernization plans. It also provides insights into the budget allocation and spending of the various countries in the region in the past, present, and forecast periods.
The Asia-Pacific defense market is segmented by armed forces, type, and geography. By armed forces, the market is segmented into the air force, army, and navy. By type, the market is divided into personnel training and protection, communication systems, weapons and ammunition, and vehicles. The report also offers the market size and forecasts for five regional countries. The market sizing and forecasts were made for each segment based on value (USD).
| Armed Forces | Air Force | ||
| Army | |||
| Navy | |||
| Type | Personnel Training and Protection | Training and Simulations | |
| Protection Equipment | |||
| Communication Systems | |||
| Vehicles | Land-based Vehicles | ||
| Sea-based Vehicles | |||
| Air-based Vehicles | |||
| Weapons and Ammunition | Artillery and Mortar Systems | ||
| Infantry Weapons | |||
| Missiles and Missile Defense System | |||
| Ammunition | |||
| Geography | China | ||
| India | |||
| Japan | |||
| South Korea | |||
| Australia | |||
| Rest of Asia-Pacific | |||
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APAC Defense Market Research Faqs
How big is the APAC Defense Market?
The APAC Defense Market size is expected to reach USD 536.67 billion in 2025 and grow at a CAGR of 3.72% to reach USD 644.20 billion by 2030.
What is the current APAC Defense Market size?
In 2025, the APAC Defense Market size is expected to reach USD 536.67 billion.
Who are the key players in APAC Defense Market?
Lockheed Martin Corporation, The Boeing Company, Aviation Industry Corporation of China, General Dynamics Corporation and BAE Systems plc are the major companies operating in the APAC Defense Market.
Which is the fastest growing region in APAC Defense Market?
Asia Pacific is estimated to grow at the highest CAGR over the forecast period (2025-2030).
Which region has the biggest share in APAC Defense Market?
In 2025, the North America accounts for the largest market share in APAC Defense Market.
What years does this APAC Defense Market cover, and what was the market size in 2024?
In 2024, the APAC Defense Market size was estimated at USD 516.71 billion. The report covers the APAC Defense Market historical market size for years: 2019, 2020, 2021, 2022, 2023 and 2024. The report also forecasts the APAC Defense Market size for years: 2025, 2026, 2027, 2028, 2029 and 2030.
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APAC Defense Industry Report
Statistics for the 2025 APAC Defense market share, size and revenue growth rate, created by Mordor Intelligence™ Industry Reports. APAC Defense analysis includes a market forecast outlook for 2025 to 2030 and historical overview. Get a sample of this industry analysis as a free report PDF download.
