Korea’s defense export boom: 140% surge leads Asia-Pacific dominance

India harbors ambitious plans to increase its defense exports to US $5 billion by 2024-25, a significant leap from its current US $1.7 billion. Initially, this goal might seem daunting, but Indian defense corporations can gather inspiration from their counterparts in South Korea – Asia’s second-highest defense exporter, trailing only behind China. 

100 K9 Vajra self-propelled howitzers to be acquired by India
Photo credit: Wikipedia

As part of its quest to secure a spot among the top four global defense exporters, South Korea is consistently outperforming China and India, which trail significantly. 

South Korea, being the preferred defense associate for various nations worldwide, has bagged substantial arms deals and joint development projects with cities such as Cairo, Riyadh, Abu Dhabi, New Delhi, and several European countries. South Korean defense firms aren’t merely closing purchase deals, but they’re also attracting substantial investments.

140 percent record

Here’s something to ponder. According to the Stockholm International Peace Research Institute, Korea has ranked as the ninth-largest arms dealer in the world from 2018-2022. Intriguingly, it is one of the two Asian countries that made it to the top 25 of this list, with the other being China in the fourth spot. Here’s an intriguing fact: South Korean defense deals saw a remarkable increase of 74 percent compared to the figures from 2013-2017. 

Here’s another compelling information: South Korean arms deals recorded a skyrocketing growth of 140 percent in 2022, culminating in a landmark value of US $17.3 billion. This dramatic figure includes transactions totaling US $12.4 billion with Poland, an ally of Ukraine, for tanks, howitzers, fighter jets, and multiple rocket launchers

Kongsberg RWS could be integrated into Hyundai Rotem K2 tank
Photo credit: Hundai

Curious about who’s buying weapons from South Korea? The main buyers are the Southeast Asian countries, India, Australia, and North and East European countries. These countries are facing considerable safety risks due to power plays by major nations like China and Russia. Russia’s recent invasion of Ukraine has certainly boosted defensive weapon sales. 

Here’s an interesting tidbit: Countries like the Czech Republic, Romania, Slovakia, Finland, Estonia, Latvia, and Lithuania typically purchase defense equipment from Europe. But now, they’re turning to Korean companies, which offer the same weapons at better prices and faster delivery times.

The future #4

In a region fraught with intense rivalries, South Korea finds itself surrounded by potent competitors, including North Korea, China, and Japan. This intricate matrix necessitates a robust defense industry capable of producing technologically advanced weaponry. As a result, South Korea has cultivated a strong defense industrial base, surpassing Japan and poised to outdo China. 

Korean K2 tank conquers Europe, Nammo to develop ammunition for it
Photo credit: Nammo

The swift rise of South Korea as a credible defense equipment manufacturer aligns perfectly with the 2022 public commitment of South Korean President Yoon Suk Yeol. The president aims to elevate the nation to the upper tiers of the world’s weapons suppliers, on par with titans such as the US, Russia, and France. 

The government has issued a directive to augment Korea’s defense exports, transitioning it from the world’s eighth-largest arms seller in 2021 to the fourth-largest by 2027. A few years ago, this might have seemed like a lofty goal. However, the potential fulfillment of this ambitious objective is on the horizon, attributable to a series of high-value agreements.

The key year 2022

In the late 2000s and early 2010s, South Korea chose to significantly increase its investment in the defense industry, a strategy that was markedly different from India’s approach to defense exports. As of 2022, this strategic move has proven to be highly successful. South Korea has managed to land substantial deals, such as selling fighter jets to Malaysia and land vehicles to Australia. There are even rumors circulating about potential discussions for selling air defense systems to Saudi Arabia

Have you ever wondered how Seoul manages to secure such massive contracts? The answer is rather straightforward. South Korea maintains active production lines primarily to meet its own needs, yet it can effortlessly switch these lines to accommodate export demands when necessary. Furthermore, they can tailor their defense products to perfectly suit their client’s unique requirements. This flexibility extends to transferring technology and establishing local production lines. Quite smart, isn’t it?

Quick production

Half Philippine fighters grounded, FA-50PH spare parts issues
Photo credit: European Post

Take a look at how Hanwha Aerospace’s Changwon Plant 3 has effectively boosted the production of K9 155mm self-propelling howitzers within a limited timeframe. Recent enhancements include a new assembly line, which has bolstered their annual capacity to yield 160 K9 units. Remarkably, this figure is set to surge to 240 K9s annually by April 2024 with the inauguration of a third production pathway. 

What’s fascinating is that the production efficiency demonstrated by South Korean defense firms appears to surpass that of American or European original equipment manufacturers. For instance, the country astonishingly delivered the initial batch of 10 K2 tanks and 24 K9s to Poland merely four months after contract signing. 

In a similar vein, Poland received their first FA-50 aircraft just ten months after contract approval in September 2022. This heightened supply speed to foreign clients is largely attributable to the “mutually beneficial association” between Seoul’s government and defense manufacturers. This close-knit bond fosters a reorganization of local deliveries to effectively fulfill export demands.

Four Korean FA-50 light attackers may find a new home in West Africa
Photo credit: KAI

Gradual kickoff by India

The leading Indian aircraft manufacturer, Hindustan Aeronautics Limited [HAL], is diligently striving to showcase its domestic Light Combat Aircraft [LCA] ‘Tejas’ on the global platform. However, it is facing challenges due to its slow production rate, which is not meeting the country’s requirements promptly. 

In 2023, the CEO of HAL, CB Ananthakrishnan, publicized plans to accelerate their production. They aim to produce 24 aircraft annually from 2025-26, progressing to 30 aircraft every year thereafter. 

The retired Vice Chief of the Indian Air Force, Air Marshal Anil Khosla, highlighted India’s dependence on the public sector. This includes organizations such as HAL, and Bharat Electronics Limited, among others, and this dependence has impeded India’s growth as a defense exporter. He discussed the challenges, “Issues with delayed policies, slow production leading to obsolescence, and the lack of robust defense manufacturing facilities are impeding India’s defense exporting goals,” he stated. Moreover, he pointed out, “The restrictions on Foreign Direct Investment [FDI] can be discouraging for global manufacturing companies considering to set up in India.”

Thorny path: Tejas Mk2 fighter will be liked but no one will buy it at first
Photo credit: Wikipedia

The trend is positive

One viable solution could be to provide a detailed, long-term unified plan that outlines the future needs of the Indian military. This would give industry insiders a clearer understanding of what’s to come. “Allowing 100 percent Foreign Direct Investment [FDI] in the defense sector would also create opportunities for private entities. This would not only inject capital but also introduce competition for the Defense PSUs,” he proposed. “It’s worth noting that in 2020, the FDI ceilings in the defense sector were raised to 74 percent via the automatic route for businesses applying for new defense industry licenses, and fully 100 percent via the government route which it would likely lead to access to advanced technology.”

“Remarkable strides have been made in the past ten years, overall demonstrating a positive trajectory. However, to achieve our set goals, we need to intensify our efforts and focus more on progress rather than just the process,” stated Lt. Gen. Subrata Saha. This dedicated individual proudly served and retired as the Deputy Chief of Army Staff. In this role, he managed perspective planning, led modernization initiatives, and supervised capability development. Furthermore, he played a pivotal role in the establishment of the Army Design Bureau in 2016.

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