Ammunition Market

[404 Pages Report] The Global Ammunition Market size is projected to grow from USD 28.0 Billion in 2023 to USD 33.1 Billion in 2028, at a CAGR of 3.4% from 2023 to 2028.

Terrorism, regional conflicts, and geopolitical disputes have become global issues, posing potential risks to countries and their populations. Thus, governments of different countries are procuring and maintaining an inventory of advanced warfare equipment and ammunition to maintain peace. Ammunition forms an integral component of combat equipment and arms that are owned by various military and law enforcement agencies across the globe.

The Ammunition Industry is dynamic in nature, and parameters such as defense budgets, the number of armed personnel, inventory of firearms/artillery/tanks, stockpiling or war reserves, and geopolitical  tensions, among others, play a key role in defining market attractiveness. Factors such as the changing nature of warfare, the militarization of police forces, the increasing incidence of drug trafficking and terrorist activities, and the modernization of armed forces are fueling the growth of the ammunition market. Apart from its use in defense forces, ammunition also sees increasing importance in civil and commercial applications such as sporting, hunting, and self-defense.

Ammunition Market Forecast to 2028

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Ammunition Market Dynamics

Driver: Geopolitical Tensions and Territorial Conflicts Across Globe

There has been a rise in the number of armed conflicts between countries in recent years, owing to growing political instabilities, economic inequalities, and geopolitical tensions. Territorial conflicts are also responsible for ceasefire violations, wars, and cross-border terrorism. Some of the major countries involved in such tensions are India, China, Russia, Israel, Algeria, Morocco, South Africa, and Egypt. The latest 2023 Israel-Hamas Conflict and regular skirmishes between India and Pakistan along the line of control (LOC) are some of the reasons for the increased demand for military ordnance and small-caliber ammunition in the South Asian region.

Conflicts between Russia and Ukraine, the civil war in Syria, ceasefire violations between India and Pakistan, and the tense relationship between China and other southeastern countries (such as Taiwan, the Philippines, Indonesia, Vietnam, Japan, South Korea, North Korea, Singapore, Brunei, Nepal, Bhutan, Laos, Mongolia, Myanmar, and Tibet) are some of the major conflicts that have escalated the need for the procurement of ammunition globally in recent years. In October 2023, Hamas crossed Israel’s borders, targeting civilian and military assets, resulting in a full-scale invasion of Gaza by Israel Defense Forces (IDF). It has led to an increased demand for ammunition on both sides, such bullets, mortars projectiles, and artillery shells among others.

Restraint: Civilian Disarmament Initiatives

Civilian disarmament poses a significant restraint for the growth of the ammunition market as it directly impacts the consumer base and demand for firearms-related products. Policies and initiatives aimed at reducing civilian gun ownership, whether through restrictive legislation or voluntary buyback programs, can lead to a decline in the overall market size. With fewer individuals legally possessing firearms, the demand for ammunition decreases, affecting manufacturers, distributors, and retailers in the ammunition industry. Moreover, as governments implement measures to control access to firearms in the interest of public safety, regulatory hurdles and compliance issues emerge, creating additional challenges for ammunition manufacturers. For instance, in 2022, 79% of all homicides in the US were linked to gun violence, prompting the US Senate to pass the Gun Control bill with higher restrictions in owning a firearm. Additionally, the ammunition industry’s reliance on civilian sales for revenue generation means that any substantial decrease in the legal ownership of firearms translates directly to a decline in ammunition sales, posing a considerable challenge to sustained market growth.

Opportunity: Stockpiling of Ammunition

Despite the risk of unplanned explosions and theft associated with the stockpiling of ammunition, there is a rise in stockpiling by both the military as well as civilian sectors. Countries across the world are procuring and stocking large quantities of ammunition to maintain sufficient war reserves. This stock of surplus ammunition has increased in several countries as a result of a reduction in the size of their armed forces. These countries have accumulated large stocks of ammunition and are continuously procuring more ammunition to ensure war preparedness.

The US Department of Defense stocks war-fighting materials in NATO countries as well as with non-NATO allies. Apart from military applications, federal law enforcement agencies in the US, such as the Department of Homeland Security, the Federal Bureau of Investigation, and the US Secret Service, also stockpile ammunition.
Ammunition is largely unregulated in the US, and there are no federal restrictions on how much one can buy at once. According to the National Shooting Sports Foundation (NSSF), at least 12 billion rounds of ammunition are manufactured annually in the US. After its purchase, there is no way to track its usage. As a result, the Vice President of Gun Violence Prevention at the Center for American Progress has expressed concern about the danger that can come with the bulk purchasing and stockpiling of ammunition. In the civilian market, panic-buying and fluctuations in the availability of ammunition, as well as volatile pricing, are the major reasons for the stockpiling of ammunition. Stockpiling of ammunition is expected to act as one of the major opportunities for the growth of the global ammunition market.

Challenge: International Measures to Control Use of Ammunition

The Arms Trade Treaty (ATT) is a multilateral treaty ratified by 91 countries across the globe that came into effect on December 24, 2014. It is one of the measures taken by the United Nations Security Council to regulate the international trade of small arms, ammunition, and other weapons. The treaty prohibits the sale of ammunition across international borders.

The Arms Trade Treaty requires all state parties to adopt basic regulations and approval processes for the flow of weapons across international borders and establish common international standards that must be met before arms exports are authorized. It also requires annual reporting of imports and exports to a treaty secretariat. These regulations impact the contracting and procurement processes related to ammunition in various countries across the globe and further impact the export of ammunition across borders. In 2019, the US announced the withdrawal of its support for the Arms Trade Treaty regulating the multibillion-dollar global arms trade, which could affect the market significantly.

Additionally, unsecured or poorly managed ammunition stockpiles contribute to insecurity, with diverted ammunition becoming a catalyst for armed conflict, organized crime, and terrorism. The improper handling of ammunition has led to unplanned explosions at munition sites in over 100 countries, causing humanitarian and socio-economic disasters.

In 2020 and 2021, a Group of Governmental Experts (GGE) adopted a comprehensive approach to address safety and security measures for ammunition throughout its lifecycle. The GGE proposed practical recommendations for a comprehensive framework on conventional ammunition management to prevent both unplanned explosions and diversion.

Ecosystem Map: Ammunition Market

Increasing Investment in the Modernization of the Military is Fueling the Rise of the Defense Applications

Based on application, there are two segments of the ammunition market: defense and civil & commercial. In 2023, the defense application held the biggest market share. The global rise in terrorism and armed conflicts is propelling the growth of the military sector in the market. The demand for large-caliber ammunition, artillery, and mortars in the Asia-Pacific area has significantly increased as a result of growing international hostilities and cross-border conflicts.

Based on Caliber, the Ammunition Market's Small Caliber Segment is Anticipated to Grow at the Fastest Rate From 2023 to 2028

Based on caliber, there are four categories in the ammunition market: small, medium, large, and others. Over the course of the forecast period, the small caliber segment is anticipated to grow at the highest CAGR. Due to the lower lethality of small caliber ammunition, there has been a growth in this market sector among homeland security and military personnel. Additionally, open online markets for small weapons and ammunition as well as increased small caliber ammunition purchase by the homeland security and defense sectors to stop the rising number of armed conflicts are driving this segment's rise.

The Ammunition Market's Bullets Segment is Anticipated to Grow at the Fastest Rate Because of the Armed Forces' Growing Emphasis on Modernizing Its Air and Land Force Inventories

Based on products, the market for the ammunitions is segmented into mortars, artillery shells, grenades, aerial bombs, and bullets. Upgrading the land and air force inventories worldwide has become more important in recent years for a variety of reasons, including air force uses and geopolitical threats. Due to which bullet segmented is forecasted to be fastest growing segment. For example, US fighter aircraft programs are still in progress. In contrast, the Indian air force is searching for multirole aircraft to bolster their armed forces; as a result, the need for associated ammunition will rise in the upcoming years due to the acquisition of new aircraft. Aerial bombs are produced for use by General Dynamics Corporation (US) and Hanwha Corporation (South Korea).

The Projectiles & Warheads Segment Will Lead the Ammunition Market in 2023

Based on components, the projectiles & warheads segment will lead the ammunition market due to their critical role in modern military and defense strategies. As armed conflicts evolve and become increasingly sophisticated, the demand for advanced munitions capable of delivering precise and lethal firepower is on the rise. Projectiles and warheads offer versatility and effectiveness across a range of missions, including air defense, anti-armor operations, and precision strikes.

The Asia Pacific Region to Account for the Highest Share During 2023 to 2028

Asia Pacific to account for the highest share during the forecast period, which is largely driven by the increasing instances of terrorism and cross-border conflicts in the region. Defense forces of different countries in Asia Pacific are procuring new ammunition under military modernization programs. Several countries, such as India and China, are carrying out dedicated ammunition upgradation programs, which have resulted in an increased demand for ammunition. The North American ammunition market is projected to grow at a CAGR of 2.6% during the forecast period. The growth of the market in this region can be attributed to the increased procurement of ammunition by the US due to the rising deployment of the defense forces of the country in overseas operations. The US is the largest developer, operator, and exporter of ammunition, globally, thereby making the North American region one of the largest consumers of ammunition across the globe.

Ammunition Market by Region

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Ammunition Industry Companies: Top

Key Market Players

The major players in the Ammunition Companies are established players such as General Dynamics Corporation (US), Northrop Grumman Corporation (US), BAE Systems (UK), Thales (France), and Nammo AS (Norway). These players have adopted various growth strategies such as contracts, partnerships, collaborations, and agreements to further expand their presence in the ammunition market.

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Scope of the Report

Ammunition Market Highlights

The Study Categorizes the Ammunition Market Based on Application, Caliber, Product, Component, Guidance Mechanism, Lethality, and Region

Recent Developments

• In January 2024, Nammo AS received USD 95 million from the Norwegian government to boost its production. Nammo will use the funding largely on its 155mm artillery ammunition.
• In December 2023, Rheinmetall has been commissioned to supply several tens of thousands of shells of various types for the Ukrainian armed forces. Delivery is scheduled for 2025. The contract is valued at USD 1.3 billion.
• In November 2023, the UK Ministry of Defence (MOD) has placed a new USD 21 million order with BAE Systems to supply additional small arms munitions over the next two years.
• In November 2023, Rheinmetall has received an order from the German government to supply Ukraine with around 100,000 rounds of 120mm mortar ammunition. The order, worth a figure in the lower-three-digit million-euro range, forms part of a recent USD 433 million military aid package for the Ukrainian armed forces. Delivery is due to begin shortly and extend over the next two years.
• In October 2023, the US Navy has awarded Northrop Grumman Corporation a development contract for the company’s newly designed 57mm guided high explosive ammunition. Designated for use with the Mk110 Naval Gun Mount, the company will test and mature the munition for qualification.

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