18MAR

Russian arms exports down 64% — SIPRI

4 min read

11:41UTC

Russia held the world's second-largest arms export market for three decades. SIPRI data shows it has lost 64% of that trade while EU exports outpace even America's growth.

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Key takeaway

Russian arms exports have structurally collapsed — demand destruction, not production failure, is the primary driver.

SIPRI data released on 9 March confirmed that Russian arms exports fell 64% over the most recent five-year measurement period ¹. The decline ends three decades in which Russia held the world's second-largest arms export market, supplying India, Algeria, Egypt, Vietnam, and dozens of states that chose Soviet-legacy platforms for cost, strategic autonomy, or both.

Three forces drove the collapse. The war in Ukraine consumes domestic production — armoured vehicles, artillery systems, and precision munitions that would fill export contracts are absorbed by a front line that has destroyed thousands of platforms. Western sanctions on microelectronics and machine tools have constrained manufacturing; the strike on the Kremniy El semiconductor plant in Bryansk hit one of Russia's few remaining domestic sources of military-grade microelectronics. And battlefield performance has eroded buyer confidence — Russian air defence systems, armour, and electronic warfare equipment have failed against Ukrainian countermeasures in conditions prospective customers can observe through open-source intelligence.

India, historically Russia's largest arms customer, has accelerated diversification. New Delhi now flies French Rafale fighters, operates American Apache helicopters, and is expanding domestic Tejas production. The S-400 system — once Russia's flagship export programme — has faced repeated delivery delays. When a supplier's own military consumes output faster than factories can produce, commercial reliability erodes regardless of price.

EU member states' arms exports grew 36%, outpacing the US at 27% and China at 11% ². Gulf States that historically purchased American or Russian systems are now buying Ukrainian interceptor drones at $1,000–$2,000 per unit , and Saudi Arabia has signed a separate deal for Ukrainian interceptor missiles . The global arms market is reorganising around the two active wars consuming its inventory — and Russia is losing customers to competitors whose equipment those wars are simultaneously validating.

Deep Analysis

In plain English

Russia was one of the world's top arms sellers for decades, exporting fighter jets, tanks, and air defence systems to customers across Asia, Africa, and the Middle East. The war in Ukraine changed that in two distinct ways. First, customers watching Russian equipment — tanks, helicopters, missiles — fail against Ukrainian forces concluded that Russian arms were less effective than advertised. Second, the threat of US and EU sanctions on buyers of Russian military equipment made procurement politically risky even for governments that wanted to buy. The combined result is a 64% fall in Russian arms exports over five years. Meanwhile, European defence companies that were minor global exporters before 2022 are now growing faster than either the US or China — absorbing orders that would previously have gone to Moscow.

Deep Analysis

Synthesis

The SIPRI data marks the structural end of Russia as a peer competitor in the global arms market. More significantly, EU export growth of 36% — outpacing both the US and China — signals the emergence of a genuinely competitive European defence industrial base. This was a stated goal of the EU Strategic Compass adopted in 2022 but was not expected to materialise within a single procurement cycle. The Ukraine war has compressed a generation of industrial development, validating EU platforms in combat conditions and creating order backlogs that will sustain European defence industries into the 2030s regardless of how the conflict ends.

Root Causes

Three structural forces drive the decline, none addressed in the body. First, demonstrated battlefield performance failures — T-72 and T-80 tank losses at scale, Kinzhal missile intercepts by Patriot, Ka-52 helicopter attrition — destroyed the export marketing value of Russia's flagship platforms; arms buyers purchase on combat reputation. Second, US and EU secondary sanctions on purchasers of Russian military equipment made procurement politically costly even for non-aligned states, with India's S-400 purchase triggering CAATSA scrutiny and deterring subsequent buyers. Third, Russia diverted export-designated inventory to domestic use, breaching delivery contracts with India, Algeria, and Egypt — permanently impairing its reliability as a supplier in ways that outlast any single political calculation.

What could happen next?

Consequence
Countries with deep maintenance dependencies on Russian platforms — India, Algeria, Vietnam — face progressively costly fleet transitions as spare-parts sanctions ground existing inventories.
Medium term · Assessed
Precedent
EU export growth at 36% establishes European defence industry as a genuine third tier in global arms markets, ending the effectively bipolar US-Russia structure that dominated from 1991 to 2022.
Long term · Suggested
Opportunity
Countries cancelling or deferring Russian contracts — particularly in fighter aircraft and integrated air defence — represent an immediate sales opportunity for EU manufacturers before Chinese alternatives consolidate those markets.
Short term · Suggested
Risk
EU export acceleration to conflict-adjacent regions could draw Brussels into secondary proliferation accountability debates currently focused on Russian and Chinese transfer patterns.
Medium term · Suggested

Source Landscape

This story draws on neutral-leaning sources from Sweden

Sweden

Primary parallel: The Soviet Union's arms export collapse after 1991 saw annual revenues fall from approximately $20 billion to under $2 billion within four years — driven by simultaneous loss of state funding, captive Warsaw Pact markets, and export credibility after Gulf War-era performance failures. The demand-destruction pattern mirrors the current Russian decline, though Russia's state has not collapsed.

Counter-parallel: US arms exports declined sharply during the 1970s détente period before recovering fully within a decade as the Carter and Reagan administrations loosened restrictions and oil-rich Middle Eastern customers entered the market. Russia lacks equivalent recovery conditions: no analogous sanctions-immune, creditworthy customer base exists that could absorb the lost volume.

Why it’s relevant now

The Soviet collapse precedent suggests the current decline is structural rather than cyclical — but that collapse took a decade to manifest fully. Russia may retain residual export capacity in non-sanctioned markets in Africa and South Asia longer than Western analysts currently project, particularly if Chinese competition does not fully displace it.

Russian arms exports historically generated $13–15 billion annually at their pre-war peak. A 64% volumetric decline implies current annual export revenue of approximately $5 billion — insufficient to cross-subsidise domestic procurement at wartime tempo or fund the R&D pipeline needed to develop credible next-generation systems.

EU manufacturer order backlogs tell the mirror story: Germany's KNDS, Sweden's Saab, and France's MBDA have all reported orders extending to 2030, with production capacity — not demand — now the binding constraint on EU export growth. This industrial bottleneck creates a medium-term ceiling on EU market share gains that the current SIPRI figures do not yet reflect.

Consensus view: SIPRI's Stockholm-based researchers use a trend-indicator value methodology that smooths single-year volatility, meaning their five-year data reflects structural rather than cyclical shifts. The Centre for Strategic and International Studies (CSIS, Washington) has separately assessed that Russian export decline will accelerate as customers' existing Russian platforms become progressively harder to maintain under spare-parts sanctions.

Counter-view: China's Arms Control and Disarmament Association (CACDA, Beijing) has argued that Russian export decline partly reflects Sino-Russian market division rather than Russian displacement by the West — with China absorbing traditional Russian customers in Africa and South Asia, meaning Western analysts may be misreading Chinese gains as Western gains in the headline figures.

Key tension: Whether EU export growth represents genuine global market capture or primarily reflects intra-alliance transfers to Ukraine and NATO members — which would inflate the headline 36% figure without expanding the EU's commercial third-party customer base.

Sources:SIPRI

Mentions:SIPRI →electronic warfare →New Delhi →Ukraine →Kremniy El →Bryansk →China →United States →Saudi Arabia →Gulf States (Saudi Arabia, UAE, Qatar, Kuwait, Oman, Bahrain) →Vietnam →Center for Strategic and International Studies →NATO →Russia →

First Reported In

Update #5 · Trump frees 124m barrels; Russia earns €6bn

SIPRI· 18 Mar 2026

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