Estonia Defense Market Size, Trends, Budget Allocation, Regulations, Acquisitions, Competitive Landscape and Forecast to 2028

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Estonia Defense Market Report Overview

The Estonia defense budget is worth $1.1 billion in 2023. The country’s defense budget is anticipated to rise in steady and gradual annual increments, registering a CAGR of more than 3% during 2024-2028. The primary driver of Estonia’s large budget is the heightened risks and concerns over Russia, following the 2022 Ukraine invasion and Russia’s continued aggressive posturing.

Estonia Defense Market Outlook, 2023-2028 ($ Billion)

Estonia Defense Market Outlook, 2023-2028 ($ Billion)

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The Estonia defense market research report provides the market size forecast and the projected growth rate for the next five years. The report covers industry analysis including the key market drivers, emerging technology trends, key sectors, and major challenges faced by market participants. It also offers insights regarding key factors and government programs that are expected to influence the demand for military platforms over the forecast period.

Market Size (2023) $1.1 Billion
CAGR (2024-2028) >3%
Forecast Period 2024-2028
Historical Period 2019-2023
Key Drivers ·        Conflict in Ukraine

·        Rising NATO-Russia Tensions

Key Sectors ·        Missile and Missile Defense Systems

·        Military Land Vehicles

·        Tactical Communications Systems

·        Military Radar

·        Military Simulation and Training

Leading Companies ·        Diehl Defence GmbH & Co KG

·        Patria Oyj

·        Lockheed Martin Missiles and Fire Control

·        Hanwha Defense

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Estonia Defense Market Drivers

Conflict in Ukraine, modernization of armed forces, and Estonia’s commitment to NATO are the key factors driving Estonia’s defense market.

Conflict in Ukraine: The conflict in Ukraine has increased Estonia’s defense commitments and will continue to drive spending throughout the forecast period. As a neighbor of Russia and a former Soviet republic, Estonia and the wider Baltic region are extremely concerned about Russian aggression. As a small nation, Estonia feels that a larger commitment than 2% GDP is needed to ensure effective defense. The budget includes a large acquisition program to expand and modernize Estonia’s military forces. There is also an increase in allied NATO deployments projected in future years, which requires Estonia to increase its military infrastructure spending.

Estonia Military Doctrines and Defense Strategies

NATO and Russia are the focal points of Estonia’s doctrine. Since gaining its independence after the collapse of the USSR, Estonia has developed close and strong ties with its Western European neighbors. These relationships, especially Estonia’s NATO membership, are integral to its military doctrine and strategy. Estonia’s defense doctrine calls for complete coordination with NATO allies to ensure Estonia is protected by larger members while remaining a valuable partner. In addition, the ‘Estonian Military Defense 2017–2026’ document outlines the desire of the armed forces to operate a defense force capable of defending Estonia from numerous threats, namely the presence of Russia in the region.

Estonia’s overarching military strategic outlook relies on the principle of total defense, which describes a nation’s entire population, industry, and political efforts being focused on military defense in a national emergency. As a small nation, this complete national mobilization is essential to defend Estonia in the event of foreign aggression. Pursuivant to the strategy of total defense, Estonia enforces mandatory conscription of all able-bodied men. Furthermore, local Kaitseliit, or military defense leagues, in every region of the country, as well as youth paramilitary defense leagues and female paramilitary defense leagues. These defense leagues enable the rapid mobilization and arming of civilians with conscript experience. In the event a foreign power should occupy a part of Estonia, the civilian population is expected to engage in organized resistance and sabotage against the enemy.

Estonia Defense Market Segmentation by Sectors

The key sectors in the Estonia defense market are missile and missile defense systems, military land vehicles, tactical communications systems, military radar, and military simulation and training, among others. In 2023, the most attractive sector in Estonia’s defense market is missile and missile defense systems. It is followed by military land vehicles.

Anti-ship missiles (AShM) are the largest subsector in missile and missile defense systems. This includes Estonia’s purchase of Blue Spear 5g SSM missiles from Israel. Platform-based Missile Defense Systems is the next largest subsector. Over the forecast period, it will be primarily driven by the purchase of IRIS-T SLMs in a joint contract with Latvia.

Estonia Defense Market Analysis by Sectors, 2023 (%)

Estonia Defense Market Analysis by Sectors, 2023 (%)

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Estonia Defense Market - Competitive Landscape

Some of the leading defense companies operating in Estonia are Diehl Defence GmbH & Co KG, Patria Oyj, Lockheed Martin Missiles and Fire Control, and Hanwha Defense. In September 2023, Estonia and its neighbor Latvia jointly signed a contract to purchase IRIS-T SLM medium-range air defense systems from Germany’s Diehl Defense. The aim of this program is to significantly increase air and missile defense for both countries and the Baltic region. Estonia and Latvia originally entered an agreement to jointly procure a medium-range air defense system in July 2022 and met their goal to award a contract by the end of 2023.

Estonia Defense Market Analysis by Companies

Estonia Defense Market Analysis by Companies

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Segments Covered in the Report

Estonia Defense Market Sectors Outlook (Value, $ Billion, 2019-2028)

  • Missile and Missile Defense Systems
  • Military Land Vehicles
  • Tactical Communications Systems
  • Military Radar
  • Military Simulation and Training

Scope

The report provides:

  • Detailed analysis of the Estonia 2022 defense budget broken down into market size and market share. This is coupled with an examination of key current and future acquisitions.
  • Explanation of the procurement policy and process. This is coupled with an analysis of Estonia’s military doctrine and strategy to provide a comprehensive overview of Estonia’s military regulation.
  • Examination of political alliances and perceived security threats to Estonia and explains trends in spending and modernization.
  • Analysis of prevalent trends in the country’s imports and exports over the last five years.
  • Analysis of the competitive landscape of Estonia’s defense industry.

Key Highlights

• Drivers of Defense expenditure include Modernization programs, NATO targets, and Internal operations

• Major ongoing procurement program include procurement of IRIS-T SLM Air Defense Missile Systems, Armored Personnel Carriers, K9 155MM artillery

Reasons to Buy

  • Determine prospective investment areas based on a detailed trend analysis of the Estonia defense market over the next five years.
  • Gain an in-depth understanding of the underlying factors driving demand for different defense and internal security segments in the Estonia market and identify the opportunities offered.
  • Strengthen your understanding of the market in terms of demand drivers, market trends, and the latest technological developments, among others.
  • Identify the major threats that are driving the Estonia defense market providing a clear picture of future opportunities that can be tapped, resulting in revenue expansion.
  • Channel resources by focusing on the ongoing programs that are being undertaken by the Estonia government.
  • Make correct business decisions based on an in-depth analysis of the competitive landscape consisting of detailed profiles of the top defense equipment providers in the country. The company profiles also include information about the key products, alliances, recent contracts awarded, and financial analysis, wherever available.

Lockheed Martin Corp
Milram AS
Hanwha

Table of Contents

  • 1. Executive Summary
  • 2. Defense Budget Assessment

    • 2.1. Budgeting Process
    • 2.2. Defense Market Size Historic And Forecast
    • 2.3. Drivers Of Defense Expenditure
    • 2.4. Analysis of Defense Expenditure Allocation
    • 2.5. Key Market Trends and Insights

  • 3. Military Doctrine and Security Environment

    • 3.1. Military Doctrine And Strategy
    • 3.2. Strategic Alliances and Geopolitics
    • 3.3. Political, Social and Economic Scenario

  • 4. Market Entry Strategy and Regulations

    • 4.1. Defense Procurement Bodies
    • 4.2. Funding Opportunities
    • 4.3. Trade Associations and Defense Clusters
    • 4.4. Types of Contracts and Opportunities
    • 4.5. Types of European Procurement Procedure
    • 4.6. Procurement Policy and Market Regulations
    • 4.7. Market Entry Routes
    • 4.8. Key Challenges
    • 4.9. Major Deals and M&A

  • 5. Market Attractiveness and Emerging Opportunities

    • 5.1. Market Attractiveness By Defense Sector
    • 5.2. Top Sectors in the Italian Defense Market
    • 5.3. Top Defense Segments By Value

  • 6. Defense Platform Acquisitions

    • 6.1. Defense Platform Acquisitions By Value
    • 6.2. SLM Air Defense Missile System
    • 6.3. Armored Personnel Carrier
    • 6.4. Common Armoured Vehicle System (CAVS) Program
    • 6.5. K9 Thunder 155mm

  • 7. Fleet Size

    • 7.1. Army
    • 7.2. Air Force
    • 7.3. Navy

  • 8. Competitive Landscape

    • 8.1. Defense Companies
    • 8.2. Main Defense Companies

  • 9. Appendix

    • 9.1. About This Report
    • 9.2. About Us
    • 9.3. Contact Us

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