Market Trends of Asia-Pacific Naval Vessels Industry
Destroyers to Exhibit the Highest Growth Rate During the Forecast Period
Escalating tensions in the South China Sea have resulted in several countries in Asia-Pacific strengthening their naval capabilities. This has also resulted in countries increasing their annual defense budget in the construction of destroyers. Many small nations with limited capabilities in naval shipbuilding are purchasing destroyers from other markets, such as Europe, the United States, China, Japan, and South Korea.
For instance, the Philippine Navy announced its plans to buy 25-30 warships, including destroyers, to modernize and increase its existing fleet by 2030. Also, in December 2022, the second of the Project 15B stealth-guided missile destroyers built by Mazagon Dock Shipbuilders Limited (MDSL) was inducted into the Indian Navy. The destroyers are being built under Project 15-B, and the Indian government has signed a deal to acquire an advanced sensor and weapon systems package for under-construction warships for nearly USD 800 million. The replacement programs in various countries to replace the current aging fleet of destroyers with modern detection and weapon systems are also propelling the demand for destroyers.
According to the Defense Buildup Program, the Japan Maritime Self-Defense Force (JMSDF) will likely increase the number of Aegis destroyers (DDG) from the current fleet of eight to ten. The Japanese government has also decided to purchase 500 Tomahawk cruise missiles, which will likely be installed on JMSDF Aegis destroyers.
India to Exhibit the Highest Growth Rate During the Forecast Period
Amidst tensions and disputes with China, India has significantly stepped up its naval capabilities through huge investments and advancements in engineering and technology. In the 2023 budget announcement, an allocation of USD 6.35 billion was set aside as the capital outlay for the Indian Navy as against USD 5.72 billion given to the force in 2022-23. As of November 2022, the Indian Navy had 45 vessels of various types under construction, including destroyers, frigates, corvettes, conventional-powered and nuclear-powered submarines, and various other ships, and plans to build a strong navy of 200 vessels by 2050.
On this note, in August 2023, the government cleared a USD 2.4 billion deal to manufacture fleet support vessels (FSVs), which the Indian Navy urgently requires. Under the Make in India initiative, the country is rapidly increasing its indigenously produced warships and initiated Project 75 Alpha. Under this project, six submarines will be designed by the Navy's in-house Directorate of Naval Design and built by the Shipbuilding Centre at Visakhapatnam. The construction is expected to commence on 2023-24, while the first submarine is expected to enter service in 2032. These developments will likely lead to the significant growth of the naval vessels market in India.
