Future of the Russian Defense Industry - Market Attractiveness, Competitive Landscape and Forecasts to 2019

Russia is modernizing its armed forces under The Russian State Arms Program to 2020

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27.02.2014 06:11:01 - Future of the Russian Defense Industry - Market Attractiveness, Competitive Landscape and Forecasts to 2019 - a new market research report on

( - From the Soviet era onwards, Russia has traditionally developed its own defense technology in competition with Western nations. Following the disbandment of the Soviet Union, Russia´s investment in the modernization of its defense systems reduced drastically, as funds were diverted towards the reconstruction of the country; since this disbanding, Russia has been reluctant to allow foreign companies into its defense


industry, an attitude that has proved to be a strong entry barrier for foreign OEMs. Although the country is modernizing its armed forces under The Russian State Arms Program to 2020, only domestic companies are involved in the modernization process.

Following the South Ossetia armed conflict with Georgia over a territorial dispute in 2008, Russia initiated a military equipment upgrade program in order to resolve the exposed shortcomings in its defense systems. Soviet era command, control, communications, and intelligence systems, coupled with aged vehicles and machinery, severely limited the country´s armed forces´ capabilities. In February 2013, Russian President Vladimir Putin declared plans to replace 30% of all its weapons with the latest models before 2015, and 70%-100% of all weapons in the forces to be renewed by 2020.

Russia has the world´s longest border, with two thirds bound by water and the country sharing borders with 14 other countries. The country´s Border Guard Service officials execute the responsibility of protecting the national border, including preventing the illegal cross-border movement of people and goods through land and sea routes. The unit is also engaged in protecting the economic interests of Russia and its natural resources. The country holds the world´s largest natural gas reserves, second largest coal reserves, and eighth largest oil reserves. In order to enhance its homeland security, the Russian government intends to replace outdated protective installations such as barbed wire fences with advanced surveillance and monitoring equipment. Measures are being taken to bring in radars, laser control systems, UAVs, CCTV cameras, night vision equipment, and other automatic information collection devices to strengthen the border security. The Federal Security Service Board (FSB), the agency responsible for internal and border security, counter-terrorism, and surveillance, is planning to utilize ground effect vehicles (GEVs) for border control purposes as well as replace the old ageing vehicles used by the border guards by advanced four-wheelers and snowmobiles.

During 2008-2012, Russia was the world´s second largest arms exporter behind the US. The low cost arms produced by the country and large amount of credit offered to countries such as Venezuela, increased arms sales over the review period, with India and China accounting for the highest share of defense exports. Of the respondents from Europe who participated in the SDI Business Outlook Survey 2012, 61% cite ´Asia´ as the region having the maximum defense opportunities in the next five years.

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