India home to 13 foreign entities of world's top arms companies

The world's second-largest buyer of military equipment, India is an automatic attractive destination for the world’s top arms companies and indications are strong that the foreign presence may increase in the near future, writes senior journalist Sanjib Kr Baruah.

New Delhi: As a corollary to being the world’s second-largest arms importer in the past five years from 2015-19, it is but natural that top arms companies are keen to set shop in India.

In 2019, India was among the top destinations, with 13 foreign entities of the top arms companies having an Indian presence, a report by SIPRI, the world’s leading think-tank on the weapons trade, has pointed out.

“Outside the arms industry hubs of North America and Western Europe, the countries that host the highest numbers of foreign entities are Australia (38), Saudi Arabia (24), India (13), Singapore (11), the UAE (11) and Brazil (10). These countries are among the world’s largest arms importers and most aim to develop their local arms industries—two factors that encourage major arms companies to establish foreign entities and expand their presence,” it said.

Out of these 13 including Airbus, BAE Systems, Boeing, General Dynamics, L3Harris Technologies, Leonardo, Lockheed Martin and Thales, two are involved in manufacturing activities.

The report hinted that the presence could increase in the near future due to raining of a higher threshold for foreign companies keen to partner with Indian firms or setting up local subsidiaries.

In September 2020, the cap on foreign investment was revised to 74 per cent.

Continuing to stamp its growing power in the global weapons business, of the world’s top 25 arms companies in 2019, four were Chinese and together they earned 4.8 per cent more revenues in 2019 year-on-year and 8.2 per cent in the four years between 2015 and 2019, the SIPRI report said.

These four Chinese companies accounted for 16 per cent of the total revenues earned by the top 25 arms companies in 2019.

Of course, with 12 companies in the world's top 25, the United States led the way cornering 61 per cent of the total combined revenue.

Arms sales in this context include the sale of military goods, services and research and development to military customers domestically and abroad.

“This is the first year for which SIPRI has sufficient data to include some Chinese companies,” the report said.

Ranked in terms of revenues, the Chinese companies respectively ranked at 6th, 8th, 9th and 24th are Aviation Industry Corporation of China (AVIC), China Electronics Technology Group Corporation (CETC), China North Industries Group Corporation (NORINCO) and China South Industries Group Corporation (CSGC).

The biggest Chinese company AVIC is present in at least six countries across the globe—Finland, Spain, UK, USA, Cambodia and Pakistan.

The world's top five arms companies continue to be American. They are Lockheed Martin Corp, Boeing, Northrop Grumman Corp., Raytheon and General Dynamics Corp., respectively ranked in order.