Amid war conditions and a global slump, the one trade which is surging is arms exports. No prizes if you guessed it right. The latest Stockholm International Peace Research Institute (SIPRI) report, released this month in March, reveals arms exports grew 10% globally. It also shows Europe is rearming fast, and that Russia lagged behind.
Despite a small dip of 4% in imports, India remained the world’s second largest arms purchaser with 8.2% of the global share for the last five years 2021-25, compared to the previous 2016-2020 period. The big shift though is the cutback of imports from Russia -- to 40%, from 51% for 2016-20. In the reshuffle, Russia’s loss has been France’s gain (29%) and Israel (15%).
The SIPRI data shows how the new wars have reshaped the world’s arms flow. Ukraine, which is fighting for its survival against a Russian takeover, became the highest importer of weapons in 2021-25 accounting for 9.7% of the global share. In the earlier 2016-20 period it was just 0.1%.
Europe is rearming
More importantly, the Ukraine war has reshaped the profile of Europe’s arms industry. Post World War-2, North Atlantic Treaty Alliance (NATO), led by the United States, was considered Western Europe’s defence umbrella against incursions from the East. However, with Donald Trump backsliding on Ukraine and Greenland, the math on the ground has changed.
While the global arms exports rose 9.2%, for the European nations arms imports more than tripled in the last 5 years, most of it going towards shoring Ukraine’s defenses against the Russian invasion. By now, total European aid to Ukraine - military, financial and humanitarian -- is in the region of $200 billion, and surpasses what the U.S. has contributed. Much of the European arms transfers are high-end US equipment like Patriot anti-ballistic defense systems, and paid for with European money.
“Taken together, the arms exports of the 27 current EU member states went up by 36%,” says the SIPRI report.That is a faster growth rate than the US’ 27% over the same period, and China’s 11%.
The looming threat of Russia, together with Donald Trump proving to be an unreliable ally, has propelled the EU nations to arm themselves and stand on their own feet. The crisis over US’ bullying of Denmark and threatening the takeover of Greenland has only exacerbated Fortress Europe.
German Chancellor Frierich Merz and France’s premier Emmanuel Macron have called for increased military spending by the EU nations . In recent months Europe has invested $175bn into Security Action for Europe (SAFE), a low-cost loan programme given to member states that buy weapons from other member states. About two-thirds of this fund is already allocated to member states.Predictably, shares of European arms manufacturers -- BAE Systems, UK, Rheinmetall Germany which produces the high tech Leopard tanks and Dassault Aviation, France -- have shot through the roof.
Russia lags behind
The most significant change in SIPRI’s data is the 64% fall in Russia’s arms export -- its global share has fallen from 21% in the 2016-20 period to just 6.8% in the last 5 years. Two factors contributed to this scenario. The Ukraine war has ensured Russia now produces for its its own frontline; and two, client states that bought Russian gear have come to learn Russian equipment is clunky and unreliable.
The SIPRI figures show India too has shifted away considerably from Russia, and has instead opted for Western sources like France, Israel and the U.S. India has also embarked on a ‘Make in India’ drive focusing on boosting indigenization of arms production. Though local production grew three-fold from Rs 46,429 crore in 2014-15 to over Rs 1.27 lakh crore in 2023-24, local manufacture accounts for tertiary equipment and small parts, while hi-tech equipment continues to be imported. India thus continues to be the world’s second biggest arms importer with a share of 8.2%.
In recent years, France has become the go-to option for India and has been delivering Rafale fighter jets, and Scorpene class submarines. There has also been a distinct policy change in favour of Israel. Today, Israel is India’s fourth largest arms supplier providing a range of equipment from air defense systemsBarak-8 and Spyder, drones, Spice 2000 and Rampage missiles and a range of infantry assault rifles.
France and China are coming up as big arms exporters but, among merchants of death, none can rival the United States. It has the world’s largest arms expenditure by far, growing from $935 billion in 2024 to $980 billion in 2025. SIPRI’s 2024 data shows among the world’s Top 10 arms contractors, the U.S. holds 6 slots, including the Top 3: Lockheed Martin Corp ($64.7 billion), RTX (formerly Raytheon Technologies) ($43.6 billion) and Northrop Grumman Corp. ($37.85 billion).
The latest SIPRI report shows the US accounts for a massive 42% share of the global arms export trade for the years 2021-25. It’s exports grew by 27% in this period, making it the dominant supplier to over a 100 countries, and it is 4 times larger than the next in line, France.
As long as the Ukraine war and the Iran conflict continues, business will be booming. It will also be good times after the shooting stops, as it will be the pause to rearm.