The global ammunition market was valued at USD 22.18 billion in 2021 and is projected to reach USD 29.24 billion by 2030 at a CAGR of 3.12% 2022 to 2030.
Ammunition is the material fired, scattered, dropped, or detonated from any weapon, such as bombs or rockets, and most notably shot, shrapnel, bullets, or shells fired by firearms. Ammunition is both a consumable weapon and the component parts of other weapons that have an effect on the target. Ammunition is available in a wide variety of sizes and types and is frequently designed for use with only specific weapon systems. There are, however, internationally recognized standards for certain types of ammunition (e.g., 5.5645mm NATO) that enable their use with a variety of weapons and by a variety of users.
The escalating frequency of intranational and international armed conflicts has compelled a number of nations to increase their military capabilities by acquiring more advanced ammunition and equipment. Modernization is currently occurring in the majority of the world's emerging economies, including Russia, China, Turkey, India, and Saudi Arabia. As a result, defense expenditures for ammunition procurement and R&D activities have increased significantly over the past several years on a global scale. These nations are investing heavily in military modernization programs to enhance and upgrade their surveillance capabilities and improve their firepower assets in terms of range, precision, mobility, and lethality, with range and precision being the primary considerations for ammunition procurements. These modernization activities are one of the most significant forces driving the demand for small-caliber ammunition and firearms. Increasing training expenditures by major economies as well as emerging economies contribute to a rise in the demand for small ammunition.
The sociopolitical necessity for countries such as China, India, and South Korea to be combat-ready has led to the massive procurement of advanced ammunition, including small-caliber ammunition, and other advanced warfare equipment. For example, China Ordnance Industries created a new rifle known as the QBZ-95, which is reportedly highly reliable, accurate, and has low recoil. This rifle is the new standard issue for the Chinese military. In addition, as of 2018, the Defence Acquisition Council of India approved the purchase of the Negev 7.62x51mm LMG for use by the Indian Army, Navy, and Air Force. This LMG will replace the 5.56x45mm INSAS LMG and is expected to enhance the lethality and range of soldiers.
Russia, Brazil, and a number of European Union nations have also implemented noteworthy military modernization initiatives. The growing need for large infantry forces, which is also a key component of military modernization programs, is another significant factor driving the global demand for ammunition.
Economic, legal, and political structures vary from nation to nation, resulting in varying regulations regarding arms, ammunition, and other forms of warfare equipment. This is one of the most significant factors influencing the leading players in the ammunition market, such as General Dynamics (US), Rheinmetall AG (Germany), and BAE Systems (UK). Compliance failures affect sales, revenues, and profit margins, and may even result in an administrative or criminal action. Numerous countries' contracting and procurement procedures are frequently influenced by regulations.
Country-specific regulations include import-export controls, technology transfers, and anti-corruption statutes. Noncompliance with these regulations could have a significant impact on the operations of market participants, resulting in a global decline in market revenue. Numerous economic, legal, and political factors influence the regulatory differences between nations, thereby restraining the growth of the ammunition market. For example, gun laws in the United States and India differ, with India having stricter regulations and gun control laws than the United States.
The development of lightweight ammunition that does not sacrifice combat performance and precision is one of the major challenges facing the ammunition industry. Several nations' efforts to modernize their armed forces and law enforcement agencies have led to a substantial increase in the total weight of ammunition. The combined weight of equipment prevents personnel from being agile and efficient. As a result, law enforcement and defence agencies are concentrating on acquiring lightweight ammunition.
This market can be segmented on the basis of caliber, products, end-use, regions and competitors. On the basis of Caliber in 2021, the small calibre segment dominated the market and contributed more than 50 percent of the global revenue. This trend can be attributed to a variety of small-caliber ammunition applications, such as shotgun pistols, assault rifles, rifles, and revolvers. In addition, the segment is anticipated to experience the highest growth rate over the forecast period due to the rising demand from security forces to combat an increasing number of armed conflicts. Increased purchases of medium-caliber ammunition by the U.S. Army and its air, land, and sea allies are anticipated to propel market expansion over the forecast period. In addition, improvements in medium calibre ammunition's ability to penetrate light armour materials are likely to create growth opportunities for the market.
In 2021, the defence end-use segment dominated the market and accounted for more than 75% of global revenue. In addition, it is anticipated that this segment will continue to hold the top spot throughout the forecast period. Increasing cross-border conflicts have fueled the global expansion of the bullets market. In addition, escalating geopolitical tensions and terrorist activities are anticipated to increase product penetration. Large quantities of full metal jacket bullets are used in military handguns, whereas hollow-point bullets are used by the air force for greater accuracy. Due to their rapid expansion and excellent stopping power, hollow-point bullets are widely utilized by law enforcement and military personnel.
In 2021, the centerfire segment dominated the market and represented more than 65.0% of the global revenue. Typically, rifles, shotguns, and handguns use centerfire ammunition. The primer is positioned in the center of the base of the casing in centerfire ammunition. This type of ammunition can be reloaded and is, therefore, the most commonly used cartridge type. Due to its ability to withstand high pressure and its reusability, centerfire ammunition is the de facto standard for military, police, and security forces. These cartridges are preferred for military operations as a result of their thicker metal casing, which can withstand rough handling without suffering significant damage.
In 2021, North America dominated the market and accounted for more than 30.0% of global revenue. The escalating threat of terrorism, combined with lax gun laws, is anticipated to increase the consumption of bullets. In addition, the increase in sports and hunting activities is anticipated to be a significant factor in the region's projected growth. The market for bullets in North America is anticipated to expand significantly due to the United States' high demand. The increased North American defence budget has a significant impact on the bullets market in the region. It is anticipated that the long-term competitive strategy of the U.S. Department of Defense for the development of new technologies and concepts of warfare will contribute to the expansion of the market.
In Europe, the government provides directives for the ownership of firearms, the distribution of firearms on a single market, and a protocol against the manufacture and trafficking of firearms. In addition, dealing with refugees from the Middle East and Syria has presented difficulties for the European defence system. Terrorism has also posed a threat to Europe, and as a result, the ammunition market in Europe is anticipated to grow during the forecast period. Rising geopolitical tensions and the growing threat of terrorist attacks are the primary factors driving the expansion of the defence industry in Asia and the Pacific. To combat violence, nations such as China and India are modernizing their military forces. These nations acquire ammunition for their armed forces and law enforcement agencies in order to combat the escalating crime rate. It is anticipated that these factors will drive market demand during the forecast period.
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