Small Arms Market Size, Share, Trends & Industry Growth Analysis

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Small Arms Market Size & Growth

The Small Arms Market size is projected to grow from USD 8.9 billion in 2022 to USD 11.1 billion by 2027, growing at a CAGR of  4.5% from 2022 to 2027. Factors such as rising investments in the development of new and advanced firearms and ammunition, modernization of small arms are driving factors assisting the growth of the small arms market.

Small Arms Markett Forecast to 2027

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Small Arms Market Trends

Driver: Rising investments in development of new and advanced firearms

Handguns such as pistol and revolvers, rifles such as assault rifles, snipr rifles etc, shotguns, and machine guns are witnessing heavy demand in North America, Europe, and the Middle East regions. In recent years, increased use of firearms has been observed across various end user applications like military, law enforcement, and commercial. The increasing demand has led to application-specific and technologically advanced small arms. Firearms manufactures are developing and launching different types of firearms to attract more customers and generate new revenue pockets. Continuous R&D activities are being carried out by major players in this industry to develop small arms with enhanced precision, mobility, and lethality.

Increasing territorial conflicts, terrorism, and political unrest

There has been a rise in the number of armed conflicts between countries in recent years, owing to growing political and economic inequalities as well as 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 Russia, Ukraine, India, China, Taiwan, Israel, Algeria, Morocco, South Africa, and Egypt. The ongoing war between Russia and Ukraine is a recent example of territorial conflict. Similarly, the conflict between India and China in the Ladakh region in 2020, the 2017 standoff between the two countries related to Bhutan, and regular skirmishes between India and Pakistan along the line of control (LOC) are some of the reasons for increased demand for military ordnance and small-caliber ammunition in the South Asian region. The civil war in Syria, ceasefire violations between India and Pakistan, and the tense relationship between China and other southeastern countries are some of the major conflicts that have escalated the need for the procurement of small arms globally in recent years.

Terrorism is also a serious threat to many countries, leading to the need for the operational readiness of armed forces and law enforcement agencies. Such instances have led to the need for a large number of infantry forces, thereby prompting militaries of different countries to have a strong inventory of advanced small arms with an aim to tackle disturbances in their country and strengthen their military forces, mainly with the objective of being battle-ready. All these increasing instances of territorial conflicts, terrorism and political unrest is giving rise to new investments in firearms industry globally which is boosting the small arms market.

Restraints: Stringent and varying legal, economic, and political regulations affecting procurement of small arms

Economic, legal, and political frameworks differ from different regions to different country, resulting in varying regulations regarding usage of arms, ammunition, and other warfare equipment. This is one of the major factors affecting the players in the small arms market. These players are expected to fully comply with the formal laws and regulations of their countries as well as those of foreign governments since compliance failures affect sales, revenues, and profit margins and may even invite administrative and criminal action. Regulations often impact the contracting and procurement processes of several countries.

The following are the key firearms-related conflicting regulations prevalent across regions

• The strict controls on the manufacture, transfer, and possession of certain small arms, such as .50 caliber, which must ensure public safety
• Serialization as well as standardization of small arms to assist law enforcement agencies in solving gun-related crimes

Regulations and norms that differ from country to the country include import-export controls, technology transfers, and anti-corruption laws. Non-compliance and non adherence to these regulations could lead to a severe impact on the operations of market players, thereby lowering market revenue globally. Differences in regulations of different countries, driven by economic, legal, or political factors, restrain the growth of the small arms market.

Opportunities: Modernization of small arms

One of the major hinderance for the small arms industry is the development of lightweight, small arms that do not compromise on combat performance and precision. Modernization programs adopted by several nations to empower their militaries and law enforcement agencies have resulted in a significant increase in the overall weight of small arms. The combined weight of equipment prevents personnel from being agile and effective. Hence, law enforcement and defense agencies are now focusing on acquiring lightweight ammunition and small arms for ease of operation and convenience.

Challenges: Proliferation of illicit small arms manufacturers

Information related to small arms flow is difficult to obtain. As per the UN Office of Disarmament Affairs, “Almost 80% of small arms and ammunition trade seems to remain outside of reliable export data”. Conflict Armament Research (CAR) classifies the causes of weapons diversion into six categories:

• Battlefield capture -30%
• Poorly managed national stockpiles-12%
• State-sponsored diversion where a State-supported the diversion of weapons to unauthorized end-users -22%
• Loss from State custody for unknown reasons -27%
• State collapse where States lose or withdraw their control over stockpiles -5%
• Unknown causes -4%

Thus, the proliferation of illicitly manufactured small arms is a serious concern that threatens the security of various countries across the world. It involves manufacturing or assembly of firearms and related materials from components/sub component that are either illicitly trafficked or do not have markings from government authorities. Such illicitly manufactured small arms are often transferred and smuggled across international borders. It not only becomes a source of terrorist activities but can also substitute branded small arms for several other applications, affecting the demand for branded small arms negatively.

Small Arms Market Segmentation

The 5.56mm caliber segment of the small arms market is projected to witness the highest CAGR during the forecast period till 2027

The growth of the 5.56mm caliber segment can be attributed to the rising adoption of small arms chambered for 5.56mm. Changing focus from shoot to kill towards shoot to injure by armed forces has resulted in the large demand for this caliber. This cartridge has various military and civil designations and is the most preferred caliber type for rifle ammunition across globe. The 5.56mm caliber ammunitions are commonly used in assault rifles, as well as AR-style handguns, which are widely available in all nations.

Rifles segment of the small arms market is projected to dominate the market owing to increasing focus on upgrading inventory by armed forces

Based on type, small arms market has been segmented into various categories, namely, pistol, revolver, rifle, machine gun, shotgun, and others. Rifles of various types such as assault rifles, snipers, recoilless rifles, modern sporting rifles, and anti-material/bolt-action rifles are considered under this category. The modern sporting rifle guns has also witnessed high adoption in the past few years due to an increase in sporting and hunting activities. Owing to undergoing modernization programs across globe demand for assault rifles as well as sniper rifles has been significantly increased as compared to other small arms thus assisting to the growth of the rifle segment.

Small Arms Market Regional Analysis

The North America market is projected to contribute the largest share from 2022 to 2027 in the small arms market

The small arms market in the North American region has been studied for the US and Canada. North America showcases the highest demand and growth potential for small arms, primarily due to the increased defense spending countries in the region, along with the rise in incidences of gun violence, which are driving both, law enforcement as well as civilian segments to procure small arms for counter-terrorism as well as self-defense applications, respectively. The increasing popularity of sporting and hunting activities among civilians has also led to a significantly higher demand for small arms in the North American region.

North American countries are awarding a number of contracts to major players of the small arms market for the delivery of small arms, thus driving the growth of the small arms market in the region.

Industry  and company experts have stated that the COVID-19 pandemic has not affected the demand for small arms in the defense sector I North American region. US Department of Defense (DoD) has asked the manufactures to continue with product activities related to small arms. However, some change has been noticed in demand for small arms in civil & commercial applications, especially in sporting and hunting activities. The demand for small arms for self-defense applications has increased to a greater extent. According to the New York Times published in April 2020, “About 2 Million Guns Were Sold in the US as Virus Fears Spread,” which showcases the increased ammunition demand for self-defense applications.

Small Arms Market by Region

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Small Arms Companies - Key Market Players

The small arms market is dominated by a few globally established players such as Colt’s Manufacturing LLC (US), Beretta (Italy), Smith & Wesson (US), Sturm, Ruger & Co., Inc. (US), GLOCK Ges.m.b.H. (Austria), Israel Weapons Industry (IWI) (US), Kalashnikov Group (Russia), Heckler & Koch Gmbh (Germany), and Ceská Zbrojovka a.s. (Czech Republic).

Scope of Small Arms Market Report

Small Arms Market Highlights

Recent Developments

• In September 2022 , The Indian Army is set to buy an additional 72,000 Sig Sauer assault rifles from United States. This contract will follow an order for 72,400 assault rifles placed last year. India had signed the previous order worth ?700 crore (USD 98 Million) in early 2019 and the deliveries of all the rifles have been completed.
• In May 2020, Colt Canada, a subsidiary of Colt’s Manufacturing Company LLC, was awarded a contract by the Canadian Department of National Defense for the supply of 272 of the new C20 semi-automatic rifle, which is described as an Intermediate Sniper Weapon with an 18-inch barrel.
• In May 2020, Colt’s Manufacturing Company LLC was awarded a Joint Foreign Military Sales contract for M16A4 Rifles from the US Army. It is a five-year, IDIQ, firm-fixed-price Foreign Military Sales (FMS) contract valued at USD 383 million.
• In April 2020, FN America, a US subsidiary of the Herstal Group, was awarded a USD 383 million foreign military sales contract for M16A4 carbines through the US army. This development strengthened the ties between the US army and the company.
• In April 2020, Ceská zbrojovka a.s. received a contract from the Czech Republic Army for the supply of 39,000 small arms priced at USD 105 million approximately. Under this contract, the army will receive 16 thousand BREN 2 assault rifles, over 21 thousand CZ P-10 pistols, over 1,600 CZ 805 G1 underslung grenade launchers, nearly 100 CZ SCORPION PDWs, and training ammunition. This contract strengthened the company’s long-term ties with the Czech Army.
• In March 2020, Hecker & Koch was awarded a USD 33 million contract by the US Army Contracting Command for the supply of Compact Semi-Automatic Sniper Systems and Squad Designated Marksman Rifles. The Compact Semi-Automatic Sniper System, classified by the Army as the M110A1 rifle, is a variant of the company’s G28 (HK241) platform chambered for 7.62 NATO ammunition, while the Squad Designated Marksman Rifle is a variant of the HK-produced M110A1. The US Army plans to procure around 5,000 to 6,000 SDMRs to replace modified M14 rifles used as designated marksman rifles.
• In March 2020, Israel Weapons Industry was awarded a USD 117 million contract by the Indian Ministry of Defence to supply 16,479 Negev NG7 light machine guns to replace its aging 7.62×54 R-chambered PKMs.
• In February 2020, FN America a US subsidiary of the Herstal Group, was awarded a USD 119 million contract by the US Department of Defense over five years for the supply of more than 167,000 M4 and M4A1 carbines.

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