By N. C. Bipindra

New Delhi: Global arms sales reached an all-time high of USD 679 billion in 2024, but a striking divergence emerged within Asia’s two largest defence producers: India and China.

While China’s leading weapons manufacturers suffered their steepest revenue fall in years, India’s defence public sector undertakings (DPSUs) recorded solid and sustained growth, driven primarily by domestic orders and an intensified push for indigenisation.

A new SIPRI analysis highlights how the fortunes of the two Asian powers are moving in opposite directions, with implications for regional military capability and global defence industry dynamics.

How China’s Arms Sales Declined

According to SIPRI’s latest Top 100 ranking, the combined revenue of the eight Chinese companies on the list fell 10% to USD 88.3 billion, marking the largest aggregate decline of any country surveyed.

This slump was severe enough to make Asia–Oceania the only region worldwide to record a drop in arms revenues in 2024.

The primary drag came from a corruption-plagued procurement environment in Beijing, which triggered contract reviews, delays, and cancellations across major defence programmes.

Which Chinese Arms Company Suffered

China’s most dramatic setback involved Norinco, the country’s top ground-weapons producer, whose revenues collapsed by 31%, falling from USD 20.31 billion to USD 13.97 billion.

Its global ranking slipped from 10th to 11th place. The fall followed an anti-corruption drive that removed key leadership figures and disrupted procurement pipelines.

Even AVIC, China’s top aerospace producer and its largest arms firm in the ranking, posted a slight decline of 1.3%, generating USD 20.32 billion.

Only China State Shipbuilding Corporation and Aero Engine Corporation of China showed any growth, still modest compared with their regional competitors.

Which Indian Weapons Firms Did Well

India, meanwhile, moved in the opposite direction. The three Indian firms in the SIPRI Top 100 — Hindustan Aeronautics Limited (HAL), Bharat Electronics Limited (BEL), and one other DPSU — collectively increased their revenues by 8.2% to USD 7.5 billion in 2024.

HAL remained India’s largest defence producer with USD 3.8 billion in arms revenue, only slightly lower than the previous year. BEL stood out as the fastest-growing Indian company, surging 24% to USD 2.5 billion, buoyed by strong government orders for radars, sensors, and electronic warfare systems.

What Difference in China, India Firms Noticed

This contrast underscores a key structural difference: China’s arms industry has been disrupted from within, while India’s is expanding through deliberate policy support.

Beijing’s corruption probes have introduced significant uncertainty into its modernisation plans, potentially delaying the fielding of next-generation equipment.

New Delhi, on the other hand, has channelled rising defence expenditure toward domestic suppliers under its Atmanirbhar Bharat (Self-Reliant India) initiative, stabilising production lines and increasing industry confidence.

What the Global Arms Sales Indicate

Globally, the picture remains one of rising demand. The United States led with USD 334 billion in revenues, and Europe’s defence firms collectively grew 13% to USD 151 billion due to the wars in Ukraine and Gaza.

Japan and South Korea posted some of the world’s strongest gains, with Japanese arms revenues rising 40% and South Korean firms expanding by 31%. Even Russia’s sanctioned industry saw a 23% rise thanks to domestic orders.

But within Asia’s two largest economies, the gap is widening. India’s defence industry is strengthening, albeit from a lower base, while China’s once rapidly expanding military-industrial complex is experiencing rare contraction.

The SIPRI report suggests that if these trends continue, India could become a more significant player in the global defence supply chain, while China’s short-term turbulence may reshape its ambitions for defence self-sufficiency and export dominance.

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