Appendix H: Arms Sales

Russia remains the second largest arms exporter worldwide, in terms of the annual value of both its export contracts and equipment deliveries. Russia’s arms export strategy included planning $13 billion in annual sales through 2016, and thereafter seeking growth until 2020.⁶⁵⁰ In 2016, Russian officials announced that Moscow exported $14.5 billion in military products in 2015.⁶⁵¹

Russia is an exporter of nearly every category of conventional military equipment, from small arms to long-range air defense systems and submarines. Moscow sees great prospects in the global arms marketplace for many of its products. In the aircraft sector, Su-35, Su-30 and MiG-29 fighter aircraft, Yak-130 combat trainers, and a variety of Mil and Kamov helicopters are key products. In the air defense sector, S-400 TRIUMF, ANTEY-2500, BUK-M2E, and TOR-M2E surface-to-air missile systems, the PANTSIR-S1 air defense missile/gun system, and IGLA-S MANPADS are top sellers. Frigates, submarines, and patrol boats are best-selling naval exports. Russia’s land warfare products are centered on T-90 tanks, BMP-3 infantry fighting vehicles, and Tigr armored cars.⁶⁵²

Marketing, contracting, and exporting Russian defense products is executed by state company Rosoboronexport (ROE). ROE typically accounts for approximately 85% of Russia’s total exports of weapons and military hardware. It ships Russian defense products to about 70 countries and cooperates with over 700 Russian defense industry companies ROE is incorporated into Rostec (formerly known as Russian Technologies or Rostechnologii), the state corporation established in 2007 to promote the development, production, and export of civilian and military high technology products.⁶⁵³Although ROE manages the majority of Russian arms trade, over 15 companies are authorized to export products abroad directly, most often spare parts and maintenance services, and these contracts account for about $2 billion annually.⁶⁵⁴

Russia’s largest export markets for arms are the Middle East/North Africa and the Asia-Pacific regions. Russia also maintains sales in Sub-Saharan Africa, Latin America, and some parts of Europe, although at a much lower level.⁶⁵⁵ Moscow is seeking to grow its market share in Southeast Asia and Latin America especially. Russia also is committed to expanding high-level military technical cooperation with other member states of BRICS (Brazil, Russia, India, China, and South Africa).^656,657

Russia is taking steps to overcome challenges and remain competitive in the global arms market. ROE increasingly has been offering commercial credit for arms transactions, especially to countries in Asia and Sub-Saharan Africa that cannot afford to purchase expensive equipment or upgrade their armed forces without financial assistance. Similarly, Russian officials have acknowledged that exchanging arms for access to customers’ natural resources may be necessary to stave off competition from other suppliers.⁶⁵⁸ President Putin has expressed Moscow’s willingness to improve financing options for contracts, expand offerings for joint production and local assembly of defense equipment in customers’ countries, and improve upon post-sale support and equipment servicing.⁶⁵⁹

Moscow casts itself as a reliable and predictable arms trade partner that does not make its commitments dependent on market preferences or political trends.⁶⁶⁰ Russia also is touting the effectiveness of its combat operations in Syria and using this to add cachet to its military products for export. Moscow believes that advertising many ol" its weapons systems as combat-proven will generate additional interest and orders from customers.⁶⁶¹