(MENAFN) Japan and South Korea, NATO’s Indo-Pacific partners, have emerged as two of the fastest-growing markets in the global arms industry, according to a new report from the Stockholm International Peace Research Institute (SIPRI).

Global arms revenues reached a record $679 billion in 2024, up 5.9% from the previous year, driven by rising geopolitical tensions and rearmament across Europe. The increase was largely fueled by US and European producers capitalizing on high demand.

Germany’s Rheinmetall posted the strongest growth in Western Europe, with broader demand fueled by conflicts in Ukraine and Gaza, regional tensions, and increasing military budgets. US companies remained the largest revenue block overall, while European firms (excluding Russia) saw the steepest regional rise as NATO countries accelerated procurement.

Japan and South Korea were among the top climbers in the Top 100 global arms producers. Japan’s leading defense firms recorded a 40% increase in revenues to $13.3 billion, marking the largest country-level rise in the ranking. South Korea followed with a 31% increase, led by Hanwha Group, which saw its revenues jump 42%, with over half coming from exports.

The surge in Asian arms sales coincides with European NATO governments ramping up military buildup, citing an alleged Russian threat. Moscow has denied any aggressive intentions, with President Vladimir Putin calling such claims “complete nonsense” and accusing the West of stoking fears to justify higher defense spending.

Despite international sanctions, Russian arms companies reported a 23% rise in revenues due to strong domestic demand, while Chinese firms saw a 10% decline amid procurement disruptions.

MENAFN02122025000045017640ID1110423896