Investing in Asia’s structural defence expansion

Asia’s security environment is more confrontational. Tensions around the Taiwan Strait, the Korean Peninsula and the India-Pakistan border make defence a long-term budget priority. This supports sustained demand for equipment, sustainment and critical systems.

As the US resets priorities, Asian allies are being pushed to do more for their own defence. Governments are responding by scaling domestic capacity and shifting spending toward national manufacturers and supply chains.

Defence budgets across the Asia-Pacific are growing faster than the global average, with multi-year commitments already in place. Japan’s move from around 1% to 2% of GDP by FY2027 signals a sustained procurement cycle and stronger domestic industrial buildout.

Rising investment in missile defence, autonomous systems, cyber security and space capabilities is expanding demand beyond traditional hardware into higher-value systems and enabling technologies.