The US’s arms sales competition with Russia is going to come down to India

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India is the world’s largest arms importer and its primary suppliers are Russia and the United States.

Although the two suppliers largely sell their weapons to different customers globally, Russian efforts to expand to new markets to compensate for declining sales to traditional partners will lead to increased competition with the United States in many parts of the world.


The impact of India’s huge significance as a weapons importer

• The most likely new markets for Russian arms sales include South America, South-east Asia, Egypt and Pakistan.
• Russian competition with the United States in arms sales will be limited to a small number of countries.
• Defense firms offering technology transfers will have an edge in the Indian market.
• For decades, Russia and the United States have been the largest arms exporters in the world. From 2009 to 2013, Russia accounted for 27% of total world arms sales, while the United States was just ahead with 29%.
• Russian arms sales have been highly dependent on a few major customers, with India, China and Algeria accounting for over 60% of Russian purchases in the last five years.
• US arms sales are far more diversified, with the top three customers (Australia, South Korea and the United Arab Emirates) accounting for under 30% of total sales.

Shifting markets for Russia


The impact of India’s huge significance as a weapons importer

• The most likely new markets for Russian arms sales include South America, South-east Asia, Egypt and Pakistan.
• Russian competition with the United States in arms sales will be limited to a small number of countries.
• Defense firms offering technology transfers will have an edge in the Indian market.
• For decades, Russia and the United States have been the largest arms exporters in the world. From 2009 to 2013, Russia accounted for 27% of total world arms sales, while the United States was just ahead with 29%.
• Russian arms sales have been highly dependent on a few major customers, with India, China and Algeria accounting for over 60% of Russian purchases in the last five years.
• US arms sales are far more diversified, with the top three customers (Australia, South Korea and the United Arab Emirates) accounting for under 30% of total sales.

Shifting markets for Russia
Russia mostly seeks to sell arms to countries that are not able or interested in buying US weapons, either because the customer states are not partners of the United States or because the products are too expensive. Iran, Venezuela and China are not likely to become areas for competition in US-Russian arms sales. Egypt has turned to Russia in recent years because of a deterioration in relations with the United States in the aftermath of the 2013 military coup. Many African and South-east Asian countries choose Russian arms when they cannot afford US-made versions.

India, a large unaligned country with a high level of military expenditures, is an attractive target for defense companies from both countries. Russia is also hoping to make inroads into Brazil and Argentina, two countries that have traditionally bought the majority of their weapons from the United States and its NATO allies.

The sectors in which Russian weapons systems are considered equal or superior to Western equivalents include: air defense, fighter aircraft, helicopters, submarines and cruise missiles. These are the sectors in which Russia’s defence industry can compete with the most advanced Western suppliers, with weapons such as the S-300 air defence system, the Su-35 fighter jets and the Kilo class submarine being noteworthy.

In other sectors, such as transport aircraft, drones, surface ships, tanks and armoured vehicles, the quality of Russian products is significantly inferior to that of the United States, and Russian exporters compete primarily on price.

The US’s weapons sales strategy
International arms sales can offset reductions in US defence spending, helping to keep the US defense industrial base healthy. Arms sales also fit with the Obama administration’s goal of strengthening allies and partners so they can provide more security for themselves without relying on US support.

The US government has revised its export control system and is trying to streamline the Arms Export Control Act to make arms transfers simpler.

The combination of high-level policymaker attention, steady reforms and a volatile international security environment has resulted in an increase in US arms sales, thereby accelerating the competition with Russia.

In fiscal year 2014, US arms sales worldwide totaled $34 billion, up $4 billion from the previous year and about three times greater than the pre-2006 average. By contrast, President Vladimir Putin yesterday announced that in 2014 Russia sold more than $15 billion worth of arms and that new signed orders stood at around $14 billion.

New opportunies — an new competitors
The United States continues to dominate the defence trade with its traditional partners such as Saudi Arabia, the United Arab Emirates and Japan. Yet it remains committed to maintaining or expanding ties to countries that Russia is also courting, such as Brazil, Argentina, India, Indonesia, Egypt and Pakistan.

In 2014, the United States and India agreed to identify co-development and co-production opportunities as part of the US-India Defence Trade and Technology Initiative (DTTI). Industry sources report that surveillance UAVs may be the first batch of products sold.

Since these products would be of particular use to India, especially in patrolling disputed areas with Pakistan, the United States may expect to see greater competition with Israel, a major drone manufacturer, shifting the Indian market towards higher-end products, and perhaps leaving fewer areas in which the main competition is with Russia.

The Russian and US defence sectors will push for greater exports to offset constraints in the defence budgets of their own governments. India, with growing expenditures and skepticism about Russia’s reliability, appears to be opening further to the United States.

Competition between the two manufacturers will also be seen in Latin America and South-east Asia, where the US ‘Asia pivot’ may help Washington win new customers.

Why the US arms competition with Russia will come down to India - Business Insider