Global military spending reached a staggering $2.44 trillion in 2023, underscoring the rapid expansion of the defence sector and its critical role in national security. Emerging markets are taking centre stage, with regions like Southeast Asia, Eastern Europe, and the UK driving demand for advanced solutions.
For defence companies, this growth presents unprecedented opportunities to secure contracts by leveraging global market intelligence and understanding regional priorities. As we look ahead to 2025, this blog explores the top five emerging defence markets and offers strategies to help suppliers grow well in rapidly evolving and competitive areas.
Source: Statista
The Top 5 Emerging Defence Markets In 2025
The competition to grab defence procurement contracts and projects has never been so fierce as global defence trends keep changing. Nations are increasing their military budgets, enhancing the capacity of their armed forces, and developing a diverse range of new technologies to meet current security requirements.
In terms of suppliers, this means new markets are opening doors, which are being aided by government initiatives and changing supply chains. Here, we consider the five emerging defence markets for 2025 and examine what makes them suitable locations for businesses aiming to establish a presence in the international defence industry.
United Kingdom
The United Kingdom’s defence budget is supposed to increase to 60 billion pounds by 2025, which means that the country will deliver growth in the military sector. One of the industries that presents significant growth opportunities is the cyber security industry and space technology.
The United Kingdom seeks to promote investment in the country’s defence industry by inviting foreign and local contractors to undertake projects. These are supposed to guarantee an increased demand for robust and innovative technology solutions.
Eastern Europe
Nations such as Romania and Poland are enhancing their armed forces with more weapons, high-tech equipment, artificial intelligence and surveillance systems. Due to international disputes and wars, there is an exponential increase in the requirement for defence spending, thus making Eastern Europe a lucrative marketplace.
Government initiatives and NATO support guarantee defence projects such as border security and counter-drone solutions. Many military programs are engaged in enhancing regional security. Thus, suppliers have many benefits.
Middle East
The Middle East has been a significant player in global defence spending, particularly in countries like Saudi Arabia and the UAE. As these nations invest heavily in the latest technologies, the region presents an ideal opportunity for suppliers.
A combination of government policies aimed at promoting local production and the need for advanced surveillance systems has turned the Middle East into a hub for defence procurement opportunities. The increasing demand for long-term protection of supply chains further enhances its attractiveness to international defence companies.
India
India’s defence sector is one of the fastest-growing sectors in the world because of government initiatives such as the Make in India program. The country allocates diverse military budgets that emphasise indigenous production and modernisation, aiming to equip its armed forces with advanced drones, naval capabilities, cybersecurity systems, and other military capabilities.
In this expanding market, numerous opportunities are available for the supply chain ecosystem, with a focus on local priorities.
Source: Statista
Southeast Asia
Due to territorial disputes and growing security threats, Indonesia, Vietnam, and the Philippines are enhancing their armed forces. With increased military expenditure by their governments and defence projects focused on securing maritime and aerial regions, the area is gradually emerging as a defence procurement market.
Moreover, with a wide range of products available, such as surveillance systems, suppliers can position themselves as key players in this flourishing market.
Tips For Securing Contracts In The Emerging Defence Markets
Here are some defence market intelligence tips for success in this sector:
Master Local Regulations
The local regulations can be complicated, but one needs to understand them before entering a new emerging market, in our case, the defence market. One would think, why? Due to the rising geopolitical tensions, countries are enforcing tighter compliance frameworks to ensure that national security is never compromised.
Policy modification is never static; therefore, constantly being ahead of the curve can easily change how you want to build your strategy.
Raising the trust level by making sure there is regulatory compliance and investing in local support services goes a long way.
Focus On Partnerships
The winning strategy in the defence industry is collaboration. Profitable opportunities exist when strong ties are created with local authorities, contractors and private companies. Partnerships enable suppliers to pursue national interests, such as embracing new technologies or assisting local production.
This facilitates trust and promotes stability, in particular in areas with increasing geopolitical threats.
Partnerships facilitate the delivery of high-value contracts in competitive markets, whether it is through providing support services or rendering specialised skills.
Showcase Innovation
Emerging markets are hungry for solutions that address modern defence challenges. Unmanned aerial vehicles, AI-driven systems, and next-gen surveillance are in high demand as nations prioritise technological advancements.
Suppliers who showcase cutting-edge offerings and adapt to global trends stand out. Tailor your pitch to highlight how your products enhance efficiency, safety, and precision. Offering demonstrations or live trials of innovative systems can further solidify your credibility and appeal in these markets.
Use Offset Policies
Many emerging markets have offset requirements that encourage local investments as part of defence contracts. Suppliers can make appropriate use of these policies by offering technology transfers, co-production agreements, or localised support services.
This not only aligns with global trends toward self-reliance but also creates deeper ties with governments and industries.
By contributing to domestic development—whether through advanced manufacturing or training in technological advancements—suppliers increase their chances of winning contracts and fostering long-term partnerships.
Customise Solutions To Market Needs
Each emerging market has its unique challenges, from securing borders amidst rising geopolitical tensions to modernising outdated defence infrastructure. Suppliers who invest in understanding these needs and providing customised solutions will always have an edge.
Whether it’s integrating unmanned aerial vehicles for surveillance or designing systems suited for rugged terrains, customisation signals your commitment to solving real problems. Backing these solutions with comprehensive support services ensures you remain a trusted partner long after the contract is signed.
Challenges In The Emerging Defence Markets
Emerging defence markets come with a fair share of challenges as well. From dealing with complex procurement processes to adapting to the demands of institutional investors, one might encounter various hardships. Regulatory barriers and local market nuances are also there, to name a few.
Additionally, increased competition and the demand for cutting-edge technological advancements like unmanned aerial vehicles further complicate entry. Without the right tools and insights, capitalising on these markets can feel like dealing with uncharted waters.
How DCI Can Help?
- Securing success in defence sector tenders begins with building the right connections. DCI’s exclusive contact database provides direct access to key decision-makers, giving you a strategic advantage in the procurement process.
- With DCI’s Market Leads, you get a head start by accessing intelligence on upcoming tenders before they’re officially released.
- DCI’s Opportunity Search will help you find relevant tenders in one easy-to-use platform. This will save you time and effort.
- Our Spend Analysis tool gives you the edge in identifying hidden opportunities and tenders, enabling smarter, data-driven decision-making.
Reach Out To DCI For Success In The Defence Industry
Success in the defence industry starts with the right tools and insights, and DCI is here to help you every step of the way. Whether it’s accessing early market leads, analysing spending trends, or connecting with key decision-makers, DCI gives you the competitive edge to secure lucrative opportunities. Ready to take your defence strategy to the next level? Request for a free demo, and let’s build a winning plan together.
