Market Size of Indonesia Defense Industry
| Study Period | 2019 - 2029 |
| Base Year For Estimation | 2023 |
| Market Size (2024) | USD 9.25 Billion |
| Market Size (2029) | USD 10.66 Billion |
| CAGR (2024 - 2029) | 2.89 % |
| Market Concentration | Medium |
Major Players
*Disclaimer: Major Players sorted in no particular order |
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Indonesia Defense Market Analysis
The Indonesia Defense Market size is estimated at USD 9.25 billion in 2024, and is expected to reach USD 10.66 billion by 2029, growing at a CAGR of 2.89% during the forecast period (2024-2029).
Indonesia is intensifying its focus on bolstering the local defense industry in response to rising demand for advanced military equipment. The government's strategy involves procuring weapons and defense systems, emphasizing technology transfers from leading OEMs to pave the way for long-term self-sufficiency. Domestically, Indonesian entities are honing their expertise in land vehicles, arms, missiles, and UAVs. In the coming years, they plan to venture into more intricate systems like flight controls, warheads, and jet engines.
Under the MEF initiative, Indonesia is adopting a capability-based defense approach to fortify its armed forces. This strategy entails acquiring defense assets aligned with threat assessments and financial capabilities. Notably, Indonesia and other ASEAN nations are embroiled in territorial conflicts with China in the South China Sea, prompting heightened military investments from the Indonesian government.
Furthermore, Indonesia is contemplating a significant overhaul of its aging defense systems to better navigate the evolving strategic landscape. This modernization thrust is propelling the market’s growth, with projections indicating a positive trajectory during the forecast period.
Indonesia Defense Market Industry Segmentation
The Indonesian defense market covers all the aspects of military vehicles, armament, and other equipment procurements. It provides insights into the country's budget allocation and spending.
The Indonesian defense market is segmented by type. By type, the market is further segmented into personnel training and protection, communication systems, weapons and ammunition, and vehicles. The weapons and ammunition segment is further classified into artillery and mortar systems, infantry weapons, missile and missile defense systems, and ammunition. The vehicles segment is divided into land, sea, and air-based vehicles. For each segment, the market size is provided in terms of value (USD).
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| Personnel Training and Protection | ||||||
| Communication Systems | ||||||
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Indonesia Defense Market Size Summary
The Indonesian defense industry is undergoing a significant transformation, driven by the government's strategic focus on enhancing local capabilities and reducing dependence on foreign suppliers. This shift is part of a broader initiative to modernize the military and improve self-sufficiency in defense production. The country's defense market is experiencing growth as it invests in advanced military equipment and technology transfers from leading original equipment manufacturers (OEMs). Indonesian entities are expanding their expertise in various defense sectors, including land vehicles, arms, missiles, and unmanned aerial vehicles (UAVs), with plans to develop more complex systems in the future. The geopolitical tensions in the South China Sea and the need to address aging defense systems are further propelling the market's expansion.
Indonesia's defense spending has seen a notable increase, reflecting its commitment to bolstering military capabilities amid regional security concerns. The government's modernization plans are supported by substantial investments, with a significant portion of the defense budget allocated to procurement and sustainment projects. This includes the acquisition of advanced aircraft and other military assets, which are expected to require a larger share of the defense budget. The country's defense industry is semi-consolidated, with key players like PT PAL Indonesia, PT Pindad, and PT Dirgantara Indonesia playing pivotal roles. Collaborative efforts with countries like Japan and India, along with joint defense production plans, are expected to enhance the local industry's growth and contribute to the economy through exports.
Indonesia Defense Market Size - Table of Contents
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1. MARKET DYNAMICS
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1.1 Market Overview
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1.2 Market Drivers
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1.3 Market Restraints
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1.4 Porter's Five Forces Analysis
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1.4.1 Bargaining Power of Suppliers
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1.4.2 Bargaining Power of Buyers/Consumers
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1.4.3 Threat of New Entrants
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1.4.4 Threat of Substitute Products
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1.4.5 Intensity of Competitive Rivalry
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2. MARKET SEGMENTATION
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2.1 By Type
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2.1.1 Personnel Training and Protection
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2.1.2 Communication Systems
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2.1.3 Weapons and Ammunitions
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2.1.3.1 Artillery and Mortar Systems
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2.1.3.2 Infantry Weapons
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2.1.3.3 Missile and Missile Defense Systems
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2.1.3.4 Ammunition
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2.1.4 By Vehicles
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2.1.4.1 Land-based Vehicles
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2.1.4.2 Sea-based Vehicles
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2.1.4.3 Air-based Vehicles
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Indonesia Defense Market Size FAQs
How big is the Indonesia Defense Market?
The Indonesia Defense Market size is expected to reach USD 9.25 billion in 2024 and grow at a CAGR of 2.89% to reach USD 10.66 billion by 2029.
What is the current Indonesia Defense Market size?
In 2024, the Indonesia Defense Market size is expected to reach USD 9.25 billion.
