Asia-Pacific to See Fastest Growth in Missile Defence Systems
Bharathi Bajaj, analyst at SDI, said: “The early recovery of the Asian markets from the recent global economic crisis has led the missile manufacturers shifting their focus to emerging economies. China, India and South Korea are among the leading spenders procuring a huge arsenal of missiles including ICBMs, air defence systems, surface-to-surface missiles, SAM’s and cruise missiles.”
According to the report, the global missiles and missile defence systems market is set to grow at a projected CAGR of 4.9 % over the next ten years. With regional rivalries, ongoing arms race, conflicting territorial claims and persistent nuclear weapons threat from North Korea and Iran, worldwide economies will experience greater demand for the missile defence systems.
Bajaj adds: “Economies all over the world are investing billions of dollars in technological developments associated with missile defence as it has become an inevitable element of the modern day warfare.”
Although missiles procurements worldwide will be large in terms of volume in the next decade, the industry will be distressed with a lack of transparency and cost overruns. For instance, the Medium Extended Air Defense System (MEADS) tri-national programme run by the US, Germany and Italy, has been plagued with cost overruns of US$2 billion.
Due to this downturn, the industry is focusing on establishing strategic partnerships, co-development projects and technology transfer agreements to control cost. Bajaj says: “Such initiatives not only boost the indigenous manufacturing capabilities of the host country but also provide foreign OEMs opportunities to explore new markets.” For instance, India which is aiming to attain self reliance in the missile defence sector by 2020 is engaged in a joint venture with Israel’s IAI for developing the next-generation anti-missile defence systems (previously known as Barak-8).
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