Global Defense Survey 2013: Economic Outlook in BRIC

Tuesday 8 January 2013, Amsterdam

According to the survey, the highest percentages of respondents from defense organizations expect a large volume of business with China, while defense suppliers anticipate a large volume of business with India. Survey results indicate that global defense industry respondents from Europe and the Asia-Pacific region are looking to increase business volumes with China and India in 2013.

‘Regulatory changes’, ‘unfavorable government policies’, and ‘rising costs’ are the leading concerns for business growth in BRIC nations, as identified by supplier respondents. Governments try to secure technology transfer from foreign players in defense deals to develop indigenous products and technologies.

The rigidity in guidelines, less favorable foreign investment policies, lack of transparency, long delays in project execution, rising corruption, and bureaucratic barriers decrease the value of BRIC nations as an economically viable business market with immense growth potential. Lower foreign investment and participation will create difficulty for buyers in BRIC nations by hampering growth, technological advancements, and production.

Overall, 60% of buyers expect an improvement in the general state of the Chinese economy, as compared to suppliers, who are more positive for the Brazilian economy to show an improvement, with 49%. Moreover, 47% and 43% of the supplier respondents also anticipate no change in general state of economies of Russia and India respectively.