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

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Indonesia Defense Market Report Overview

The Indonesian defense budget is $8.8 billion in 2023 and is expected to grow at a CAGR of more than 2% from 2024 to 2028. The increase in budget is primarily driven by the need to upgrade the country’s existing arsenal of armed forces, its participation in peacekeeping missions, and its territorial dispute with neighboring regions.

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

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

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

Market Size (2023) $8.8 billion
CAGR (2024-2028) >2%
Forecast Period 2024-2028
Historical Period 2019-2023
Key Sectors ·       Military Fixed-Wing Aircraft

·       Naval Vessels and Surface Combatants

·       Tactical Communications Systems

·       Missiles and Missile Defense Systems

·       Military Unmanned Aerial Vehicles

·       Military Radar

·       Underwater Warfare Systems

Leading Companies ·       The Boeing Co

·       Dassault Aviation SA

·       PT PAL Indonesia and Fincantieri S.p.A

·       Airbus Defence and Space

·       Korea Aerospace Industries Ltd

·       Lockheed Martin Corp

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Indonesia Defense Market Drivers

Military modernization is one of the key factors driving the defense market in Indonesia. During 2017–24, Indonesia plans to modernize its armed forces and aims to establish “Minimum Essential Forces”. It is a strategy for establishing a force structure consisting of key military capabilities to maintain adequate levels of operational readiness to rapidly deploy forces in case of national contingencies.

Moreover, Indonesia faces several territorial disputes with China over the Natuna Islands and Malaysia over the Ambalat sea block. Also, the recent event of Australian forces violating Indonesia’s sovereignty is also concerning. Due to such disputes, the government is increasing investment to strengthen the military and defense sector.

Indonesia Military Doctrines and Defense Strategies

Indonesia’s four armed services, collectively termed the Armed Forces of the Republic of Indonesia (Angkatan Bersenjata Republik Indonesia, ABRI), consist of the three military services (the army, navy, and air force) and the police. Collectively they attempt to build a cohesive and inclusive nation that can accommodate the diversity of human life on the Indonesian islands have been central to the country’s history. ABRI participates in perhaps the most unique national community in the world. The Center for Armed Forces, led by the ruling branch, the military, has been the country’s premier institution since 1966.

The performance of the Indonesian military is based on a well-developed defense doctrine called Total People’s Defense, or Hankamrata, based on experience during the liberation struggle. The doctrine declared that Indonesia was incapable of storing large military assets and did not compromise its hard-won independence by sacrificing its uncompromising status and reliance on other nations for protection. Instead, the nation will defend itself with a strategy based on a local terrorist war in which armed forces, deployed throughout the nation, will act as a force to mobilize and lead all human beings in the human war for self-defense. The success of the strategy, according to the doctrine, required that a close bond between civilian and military personnel be maintained to promote universal support and enable the military to manage all military-related resources.

Indonesia Defense Market Segmentation by Sectors

The key sectors in the Indonesia defense market are naval vessels and surface combatants, tactical communications systems, military fixed-wing, missiles and missile defense systems, military unmanned aerial vehicles, military radar, and underwater warfare systems, among others. Military fixed-wing aircraft is the largest sector within the Indonesian defense market in 2023. The market will be mainly sustained by the multi-role aircraft segment, which is the largest sub-segment. On the other hand, the growth in the military fixed-wing aircraft market sector will be mainly driven by the transport aircraft segment.

Indonesia Defense Market Analysis by Sectors, 2023 (%)

Indonesia Defense Market Analysis by Sectors, 2023 (%)

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Indonesia Defense Market - Competitive Landscape

Some of the leading defense companies operating in Indonesia are The Boeing Co, Dassault Aviation SA, PT PAL Indonesia and Fincantieri S.p.A, Airbus Defence and Space, Korea Aerospace Industries Ltd, and Lockheed Martin Corp among others. In 2022, Indonesia signed a contract to acquire more than 30 units of the F-15ID. It is a highly customized variant of the Boeing F-15EX aircraft, from the US, giving a much-needed boost to the country’s defense industry.

Indonesia Defense Market Analysis by Companies

Indonesia Defense Market Analysis by Companies

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Segments Covered in the Report

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

  • Naval Vessels and Surface Combatants
  • Tactical Communications Systems
  • Military Fixed-Wing Aircraft
  • Missiles and Missile Defense Systems
  • Military Unmanned Aerial Vehicles
  • Military Radar
  • Underwater Warfare Systems


The report provides:

  • Detailed analysis of Indonesia’s defense market with market size forecasts covering the next five years. The report will also analyze factors that influence demand for the industry, key market trends, and challenges faced by industry participants.
  • Indonesia defense budget: detailed analysis of the Indonesia 2023 defense budget broken down into market size and market share. This is coupled with an examination of key current and future acquisitions.
  • Regulation: the procurement policy and process is explained. This is coupled with an analysis of Indonesia’s military doctrine and strategy to provide a comprehensive overview of the military procurement regulation in Indonesia.
  • Security Environment: political alliances and perceived security threats to Indonesia are examined to explain trends in spending and modernization.
  • Competitive landscape and strategic insights: analysis of the competitive landscape of Indonesia’s defense industry.

Reasons to Buy

  • Determine prospective investment areas based on a detailed trend analysis of the Indonesia 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 Indonesia 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 Indonesia 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 Indonesia 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.

Hanwa Ocean
Dassault Aviation SA
Turkish Aerospace Industries Inc

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. Analysis Of Defense Budget Allocation
    • 2.6. 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. Trade Associations and Defense Clusters
    • 4.3. Types of Contracts and Opportunities
    • 4.4. Procurement Policy and Market Regulations
    • 4.5. Market Entry Routes
    • 4.6. Key Challenges
    • 4.7. 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. Indonesia Fighter Xperiment (IFX)
    • 6.3. F-15ID
    • 6.4. Rafale F4
    • 6.5. FREMM Frigates
    • 6.6. A400M Atlas

  • 7. Fleet Size
  • 8. Competitive Landscape

    • 8.1. Defense Companies Operating in Indonesia
    • 8.2. Main Defense Companies

  • 9. Appendix

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

Frequently asked questions

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