Hindustan Aeronautics Limited is one of the three Indian companies in the top 100

Global arms sales increased even as the world economy contracted in 2020, according to a report by Swedish think tank Stockholm Institute Peace Research Institute.

Combined arms sales by the three Indian companies in the Top 100 defence manufacturers worldwide grew by 1.7%, according to the latest report by Swedish think tank Stockholm Institute Peace Research Institute (SIPRI), which also said that international arms sales increased even as the global economy contracted by 3.1% during the first year of the COVID-19 pandemic. U.S. companies accounted for 54% of the Top 100’s total arms sales in 2020 followed by Chinese firms which accounted for 13%.

The three Indian companies in the SIPRI Top 100 for 2020 rankings are Hindustan Aeronautics Limited (HAL), Ordnance Factory Board and Bharat Electronics Ltd. (BEL). “Their aggregated arms sales of $6.5 billion were 1.7% higher in 2020 than in 2019 and accounted for 1.2% of the Top 100 total,” according to the report ‘The SIPRI Top 100 arms-producing and military services companies, 2020’ released on Monday.

The arms sales of HAL (ranked 42nd) and BEL (ranked 66th) increased by 1.5% and 4.0%, respectively while the Indian Ordnance Factories’ (ranked 60th) arms sales rose marginally (by 0.2%), according to the report.

Stating that domestic procurement had helped shield Indian companies against the negative economic consequences of the pandemic, the report said, “In 2020 the Indian Government announced a phased ban on imports of more than a hundred different types of military equipment to support domestic companies and enhance self-reliance in arms production.”

As part of measures to support domestic industry, the Defence Ministry had issued two 'positive indigenisation lists' notifying items that cannot be imported and can only be procured from domestic industry.

Arms Sales Increased During Pandemic

“The industry giants were largely shielded by sustained Government demand for military goods and services,’ said Alexandra Marksteiner, researcher with the SIPRI Military Expenditure and Arms Production Programme, on the increased global arms sales during the pandemic. “In much of the world, military spending grew and some Governments even accelerated payments to the arms industry in order to mitigate the impact of the COVID-19 crisis.”

Nevertheless, operating in the military market did not guarantee immunity to the effects of the pandemic with supply chain disruptions and delayed deliveries, the report noted.

Overall, the arms sales of the Top 100 arms-producing and military services companies totalled $531 billion in 2020, an increase of 1.3% compared with sales in 2019. The U.S. once again hosted the highest number of companies ranked in the Top 100 and arms sales of the 41 U.S. companies amounted to $285 billion, an increase of 1.9% compared with 2019, and accounted for 54% of the Top 100’s total arms sales.

For the same time period. the combined arms sales of the nine Russian companies ranked in the Top 100 decreased from $28.2 billion in 2019 to $26.4 billion in 2020, a 6.5% decline while the combined arms sales of the five Chinese companies in the Top 100 amounted to an estimated $66.8 billion in 2020, 1.5% more than in 2019.

At the same time, arms sales of companies in the Top 100 based outside the U.S., China, Russia and Europe totalled $43.1 billion in 2020, an increase of 3.4% on 2019, and represents 8.1% of the total arms sales of the Top 100. Five of these companies are based in Japan, four in South Korea, three each in Israel and India, and one each in Canada, Singapore, Turkey and the United Arab Emirates, according to the report.