Russia’s arms export industry is crumbling under the strain of its conflict with Ukraine and a weakened economy, as per the recent findings of the Stockholm International Peace Research Institute (SIPRI) released on Sunday.
Russia has dropped to third place among the world’s largest weapons exporters, according to the organization’s annual update of the arms industry. This marks the first time that Russia has fallen behind France and the U.S., losing its previous second-place ranking.
According to SIPRI, Russia experienced a significant decline in its arms exports from 2014–18 to 2019–23, with a decrease of 53 percent. This decline has been rapid over the past five years, resulting in a decrease in the number of significant customers from 31 to 12 nations.
Newsweek reached out to Russia’s Industry and Trade Ministry for comment.
Pieter D. Wezeman, a senior researcher in the SIPRI Arms Transfers Programme, expressed a pessimistic view regarding Moscow’s prospects, as he told Newsweek.
According to Wezeman, the decline in Russian arms exports is not a temporary setback, but rather a long-lasting trend from which they are unlikely to recover to previous levels.
Russia’s ambitions to maintain its position as a leading arms supplier in the global market are likely to face significant hurdles. The data on pending weapon orders suggests that Russia is falling behind in this competitive landscape.
According to Wezeman, there is a possibility of rapid change in the situation, as new significant orders may emerge. However, at present, no such orders have been observed. Additionally, there is uncertainty regarding whether the existing orders will ultimately result in deliveries.
Now, after being in progress for over two years, the war between Russia and Ukraine has resulted in a devastating toll of casualties, estimated to exceed half a million. This ongoing conflict has significantly strained Moscow’s military industrial resources. In response, President Vladimir Putin has taken measures to reorient the Russian economy towards supporting the war effort. This includes tapping into previously neglected military stockpiles and exploring new avenues for foreign suppliers.
Russia’s domestic industry and international trade have been limited due to sanctions imposed by Western countries. Despite efforts to circumvent these sanctions, the lack of access to Western technology has hindered the production of advanced weapons. As a result, the Russian government has been forced to abandon projects such as the highly anticipated T-14 Armata main battle tank, citing its high cost as a primary reason for discontinuation.
The country’s exclusion from international financial markets has significantly hindered its capacity to engage in business transactions.
According to Wezeman, the Russian arms industry faces the challenge of meeting domestic demand and export requirements simultaneously. This is further complicated by the presence of sanctions on technology, which hinder Russia’s ability to produce weapons. Furthermore, payment options have proven to be a hindrance in finalizing deals with countries like India.
Russian tech’s underwhelming performance on the battlefields of Ukraine has been detrimental to military industrial salespeople. Russian ships have faced repeated sinkings, planes have been downed, and their air defense systems have proven inadequate. The high-end equipment from Moscow has failed to meet expectations.
Export shrinkage has resulted in the Russian arms industry becoming increasingly dependent on Asia and Oceania. These regions alone accounted for 68 percent of total exports between 2019 and 2023. Notably, India accounted for 34 percent of these exports, while China accounted for 21 percent. However, as emerging superpowers, these countries have diminishing demand for Russian arms.
According to Wezeman, the decline in arms exports to India and China has had a significant impact on the overall level of Russian arms exports. He stated, “Those are the two major changes that we see in Russia arms exports, and that has an enormous impact on the total level of Russian arms exports.”
According to an expert, India has not been persuaded to procure additional Russian combat aircraft. The country has only considered a limited number of replacements for the ones that have crashed in the past. As a result, India has shifted its focus towards France for its combat aircraft requirements.
The country is seeking advanced anti-submarine warfare capabilities from the United States. Additionally, it is making strides in developing its own arms industry, allowing it to manufacture ships and combat aircraft that it previously relied on Russia to provide.
Moscow’s top customers also have significant political considerations. For instance, New Delhi aims to demonstrate its ability to collaborate with the U.S. in countering the threat posed by China. Vietnam shares the same objective, while Egypt has significantly reduced its expenditure on Russian arms and instead favors U.S. products, military assistance, and political backing.
According to Wezeman, the power dynamic between Moscow and Beijing is gradually shifting, even in terms of weaponry. He pointed out that China has developed a competitive arms industry, allowing them to rely less on arms imports from Russia. While there may be a few exceptions, China is now able to acquire its own arms.
According to experts, China is no longer interested in relying on Russian equipment. They are confident in their ability to produce goods that are on par, or even surpass, the quality of Russian products. As a result, the demand for Russian equipment in China is rapidly declining.
The source states that it is uncertain how Moscow will compensate for the increasing decline in its exports. As per Wezeman, Russia did not hold much significance in Europe before, and this remains true even now. Furthermore, Moscow never achieved significant success in the Middle East. In Latin America, its only notable market was Venezuela for a limited period until the country faced severe economic challenges.
“The Middle East could potentially be the only region where real interest may be seen,” he stated. “However, it is still too early to make any forecasts in this regard.”
According to Wezeman, Russia needs to exercise caution when assuming that they can re-enter the market with their current equipment offerings.