Russian Homeland security spending is expected to increase at a CAGR of 5.90% during the forecast period
- The Russian Defense Industry: Market Opportunities and Entry Strategies, Analyses and Forecasts to 2017 report is now available at ASDReports.com!
Russian defense expenditure registered a CAGR of 10.19% over the review period and is estimated at US$77.9 bn in 2013. It is forecast to grow at a CAGR of 18.00% over the forecast period to reach an estimated US$151 bn in 2017. Defense expenditure as a percentage of GDP is expected to increase from 3.1% in 2012 to 4.9% in 2017. In total, the country is forecast to spend an estimated US$556 bn on its armed forces over the forecast period, of which approximately US$277 bn will be allocated for capital expenditure.
In 2008, the Russian government passed the Strategic Sectors Law (SSL), requiring any foreign firms wishing to purchase a controlling interest in a domestic defense firm to be pre-approved by the government. If approved, the foreign firm can only operate as a minority shareholder in the venture and cannot make decisions which would affect the manufacture or sale of the defense systems produced. This restrictive market entry policy has severely limited opportunities for prospective foreign OEMs to enter the Russian defense industry.
Future of the Russian Defense Industry - Market Attractiveness, Competitive Landscape and Forecasts to 2018
From the Soviet era onwards, Russia has traditionally developed its own defense technology in competition with Western nations. Following the disbanding 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.
The Russian defense sector is saturated with domestic firms, which cater to the majority of the Russian armed forces’ defense needs. Therefore, entry for foreign defense companies is severely restricted, with governmental approval required. Also, foreign firms are not allowed to establish ventures in order to manufacture defense goods in Russia, with foreign companies only permitted to hold a minority share in Russian defense firms and not having the right to make decisions pertaining to the manufacture or sale of defense systems.
Your company’s press release on ASDNews and to thousands of other journalists and editors? Use our ASDWire press release distribution service.
Source : ASDReports - Market Research