26.03.2019 Author: Dmitry Bokarev

A Prosperous Time for the Russian Defense Industry


It is well known that military and technical cooperation is a sign that there is a great degree of trust and strong ties between the two states to begin with, and secondly, this cooperation is one way to further strengthen bilateral ties. The economic side of cooperation is just one part, but it is important because the arms trade is a high-tech sector of the economy, which brings in significant profits for those involved. There is also a strategic side to the defense partnership: a country that is purchasing weapons and military equipment from another state is unlikely to turn on their supplier and engage in hostilities with them.

According to some sources, arms-exporting countries sometimes deliberately produce somewhat lower quality export models than the weapons they produce for themselves, which also reduces the importing country’s chances of victory if a conflict were to break out between them. Apart from this, modern high-tech weapons – anti-aircraft warfare systems, a variety of “smart missiles”, etc – are specifically programmed so that sometimes it is simply impossible to catch the exporting country in the crosshairs. It should also be noted that various fantastical theories are being put forward that the manufacturer can use special software to continue to remotely control equipment that has already been delivered to the purchaser.

It is an incredible narrative, but these are the kinds of suspicions which underpinned a monumental campaign that gained momentum in 2018. The United States and its allies–the United Kingdom, Canada, Australia, New Zealand, and Japan–banded together against Chinese companies Huawei and ZTE, the world’s largest suppliers of telecom equipment. The West announced that the use of Chinese equipment in its communication networks would pose a threat to national security by opening the door to Chinese intelligence. This was followed by a ban imposed on the import and installation of Huawei and ZTE equipment on the territory of these Western countries and that of their allies.

In any case, signing a bilateral deal for the purchase of weapons is a unique way of guaranteeing friendly relations will be maintained. In a sense, suppliers establish a sphere of influence in arms-importing countries. That is exactly why states with a developed arms industry always aim for self-sufficiency by producing their own weapons and military equipment, and it is exactly why the world’s two largest weapons producers and exporters–the US and Russia–are investing a lot of energy in competing for markets in other countries, and are primarily interested in signing deals with states which are in some way connected to their strategic interests. Russia makes sure that states which have a role to play in ensuring the security of its borders such as China and countries in Central Asia buy Russian weapons. Since as far back as the Cold War period between the USSR and the United States, Russian weapons have also been supplied to regions where there has been competition between Russia and America: The Middle East, Southeast Asia, Latin America, and Africa. A total of about 50 countries purchase their military equipment from Russia.

Russia’s only state-owned intermediary agency engaged in the sale of arms abroad–Rosoboronexport–has been doing well recently. According to available reports, from the beginning to November of 2018, Rosoboronexport signed more than a thousand contracts worth about $20 billion. The most high-profile deals included a five-billion contract with India in October 2018 for the supply of a batch of S-400 air defense missile systems, as well as agreements which were made for the delivery of the same S-400 missile systems to China and Turkey in 2015 and 2017, respectively. It is worth noting that all of these deals took place, undeterred by the threat of American sanctions.

Throughout 2018, the US has repeatedly stated that it is can take action against countries buying S-400 missile systems in accordance with its Countering America’s Adversaries Through Sanctions Act, which was adopted in August 2017. While Washington is still holding off on threatening Turkey and India, which are considered American allies, with actions, sanctions were imposed against China in September 2018, which is now locked in a trade war with America. The United States blocked the Equipment Development Department of China’s Central Military Commission from applying for export licenses in US jurisdictions, banned the supply of American equipment to them, and deprived the organization of access to the US financial system. Despite all of this, China, India, and Turkey have acquired the S-400 missile systems and intend to continue their defense partnership with Russia. This would not only suggest that the Russian air defense missile system is of high quality with sophisticated features, but in view of how the deals have taken place, it also indicates the particular alignment all three states have on foreign policy. While China has been one of the United States’ key competitors for many years now, Turkey only recently soured relations with Washington by seeking to exit the custody of its NATO partner. India, meanwhile, maintains relations with both Russia and the United States, and buys weapons from both countries, but there has been a noticeable shift towards Russia in 2018.

In December 2018, China conducted its first tests on the S-400 systems it received from Russia and is pleased with the results; China has stated that the complex is fully consistent with all the characteristics that were listed in promotional material.

In early 2019, Russian defense technologies continued to take the global defense market by storm. Delegations from Russia made a successful pitch for cutting-edge technology from the Russian defense industry at several international exhibitions. In January, specialists from Rosoboronexport and Russia’s Federal Service of Military-Technical Cooperation visited International Security and Defense Exhibition Shield Africa 2019 (Abidjan, Côte d’Ivoire). This is not the largest or most expensive exhibition there is, but experts can see considerable potential it holds. Given that some African states are developing at a rapid pace in the face of a growing threat posed by terrorism, African armies may soon be in need of a greater quantity of higher-quality weapons, and arms suppliers from all over the world will not want to miss their chance to supply them.

However, the events that have proved truly significant were the IDEX 2019 International Defence Exhibition & Conference (Abu Dhabi, United Arab Emirates) and Aero India 2019 (Bangalore, India). Both exhibitions provided important platforms for signing major defense deals and arenas where the largest producers of defense products could compete with each other. That being the case, they were held almost simultaneously: 17-21 February and 20-24 February 2019, respectively. Representatives of the Russian defense industry and related economic structures took part in both events as strong market competitors.

The most interesting Russian exhibits at IDEX 2019 were the T-90MS tank, the Kalashnikov AK-200 series (AK-12), the BUK-M3 Viking and Pantsir-ME (“Shell”) missile systems, and Kalashnikov’s KYB (“Cube”) Kamikaze Drone. Following the exhibition, Russia and the UAE signed contracts worth $ 5.5 billion.

Russia secured a number of contracts worth approximately $1 billion with Indian companies at Aero India 2019—the exhibition which mainly focuses on military aircraft—to localize the production of Russian helicopters in India. The date when helicopter production is set to begin still remains unknown, but a factory was opened in India at the beginning of March, where the AK-200 machine gun will be manufactured, which was first unveiled at IDEX 2019.

Thus, 2019 got off to a very successful start for Russia’s defense industry and arms exports. However, the Russian defense industry is not going to rest on its laurels: the industry is now busily preparing for LIMA 2019—one of the largest maritime and aerospace exhibitions in the Asia-Pacific—which will be held in Malaysia in late March.

Dmitry Bokarev, political observer, exclusively for the online journal “New Eastern Outlook”.


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