Korean exports of defense equipment expected to reach 87 percent increase by 2027.

According to a report by Lee Kyung-min in the Korea Times, Korea is projected to generate 29.7 trillion won ($23.4 billion) in defense exports by 2027. This represents an 87 percent increase from the 15.9 trillion won recorded in 2021. The report, released by the Korea Institute for Industrial Economics & Trade (KIET) on July 17, indicates that this growth is driven by the country's robust momentum in recent years. The defense industry is expected to create 69,000 jobs by 2027, more than doubling the 33,000 jobs created in 2021.
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New Korean-made K2PL Main Battle Tanks purchased by Poland (Picture source: Polish MoD)

Commissioned by the Federation of Korean Industries (FKI), KIET's study reveals that these impressive figures will elevate Korea's position on the list of global defense powerhouses from the current eighth place to fourth. Last year, Korea's defense exports amounted to $17.3 billion, marking an almost six-fold increase from $3 billion in 2020.

Notably, Korea's defense exports to Poland have been a significant contributing factor to this rapid growth. Over the past year, exports of Korean-made fighter jets, tanks, and artillery weaponry to Poland exceeded 600 billion won. Specifically, Korea's exports of tanks and other armored vehicles to Poland reached $255 million in the first four months of this year, surpassing the total exports of $201 million for the entire previous year. These exports include FA-50 light attack fighter jets, K2 battle tanks, and K9 self-propelled howitzers.

The report emphasizes the need for Korea to foster diplomatic relations with countries expressing interest in strengthening defense business ties, particularly Saudi Arabia, Egypt, and India, which present significant new demand. To sustain growth in these markets, timely revision of trade and defense policies is crucial, along with overseas expansion and local manufacturing of key products. The report suggests that embassies, the Korea Trade-Investment Promotion Agency (KOTRA), and private defense firms should collaborate to establish a strong local presence as soon as possible.

Furthermore, the report recommends reinforcing bilateral technological ties with the United States to facilitate the arrangement of key defense and industrial technology transfers. It underscores the importance of supply chains in shaping Korea's role and influence in the global market. To maintain the current strong export momentum, strategies for both quantitative and qualitative growth will be necessary.

Defense News July 2023