The Russian arms industry is canceling foreign contracts. It is losing billions

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The Russian arms industry is canceling foreign contracts. It is losing billions

“Now export deliveries have fallen for obvious reasons: everything is for the front, everything is for victory,” said Sergei Chemezov, head of the Rostech corporation under Western sanctions, which unites more than 240 Russian state-owned companies working for the military. In an interview with Reuters, Chemezov assured that there is a list of foreign customers waiting for Russian deliveries and that the queue “is quite long”.

French weapons are better than Russian ones

But isn’t this just propaganda? According to the Stockholm International Peace Research Institute (SPIRI), Russian arms exports in 2019-2023 decreased by more than half (53%) compared to the previous five-year period. As a result, Russia lost its position as the world’s second-largest arms market and its share of global exports fell to 11%.

The first place is always occupied by the United States, whose exports increased by 17%. The Americans are already almost a monopoly – their share of the global arms market has reached 42%. Russia has been replaced by France, which has increased its exports by 47% in five years.

Meanwhile, as Chemezov reported, the value of contracts cancelled by Russian factories over the past year may reach $5-10 billion. However, the Russian authorities themselves cannot accurately provide the size of the export order book for the domestic arms industry. According to Chemezov, “the export order book reached a record $60 billion.” Meanwhile, the head of the Federal Service for Military-Technical Cooperation (FSMTC) of Russia, Dmitry Shugaev, estimated export orders at $50-55 billion.

They get the money, but there are no weapons. Russia is not honoring the agreements

The Russians do not disclose which customers they terminated contracts with and which weapons they were referring to. In March 2023, it became clear that Russia was breaking contracts with India – for years the largest importer of Russian weapons. These were deals, among others: on S-400 Triumph anti-aircraft missile systems. Rosoboronexport (a state monopoly in the Russian arms trade) concluded a contract for five sets for $5.4 billion in 2018 and agreed to deliver them to the customer by the end of 2024.



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