What Arms Trade Data Say About Where the “Quad” Stands

U.S. Arms Sales to India Are a Key Question For U.S. Strategy in Asia

The rise of China and the challenge that China poses to the United States is the defining trend around which American strategists orient their thinking about Asia. In Canberra, Delhi, and Tokyo, national security policymakers view China as the foremost national security threat facing their nation. This shared focus on China underpins the idea of the “quad,” a proposed security partnership between Australia, India, Japan, and the United States, which would represent a democratic bloc against Chinese hegemony in Asia.

The first manifestation of the quad concept was a 2007 assistant secretary-level meeting between the four countries on the sidelines of an ASEAN regional forum meeting. Chinese objections to any formalization of the quad relationship stymied its maturation, but increased concern in recent years about bellicose Chinese behavior has injected new life into the idea. In 2015, Japan became a permanent member of the Malabar naval exercise, of which the U.S. and India were formerly the only permanent members. In March 2016, PACOM commander Admiral Harry Harris raised the prospect of reviving the quad, saying “We are all united in supporting the international rules-based order that has kept the peace and is essential to all of us.”

Admiral Harry B. Harris (Japanese.China.Org.Cn)

Analysts looking to assess the status of the “quad” tend to focus on joint military exercises and overlook the arms trade. But arms sales can be a useful indicator for the level of strategic trust between countries. Four of the top ten buyers of U.S. arms from 2005 to 2015 are U.S. treaty allies and the United States’ network of defense partners around the world is closely related to the network of countries to which it sells arms.[1] An arms sale indicates trust on the buyer side (in the efficacy of the product and that subsequent support will be rendered) and on the seller side (that their technology will not be used against them or shared with others). Militaries using the same platforms are also more interoperable, meaning they are better able to fight side-by-side. In short, arms sales, like joint military exercises, can be viewed as an indicator of the strength of the military relationship.

Data on the arms trade between the quad partners suggests that India is the outlier of the group, as it buys only a small fraction of its arms from the United States, whereas the United States is the primary supplier of imported arms for Australia and Japan. U.S. policymakers seeking to advance the quad concept and secure a closer relationship with India, something many U.S. strategists view as critical to countering Chinese primacy in Asia, face a choice about whether to attempt to integrate India into the de facto arms network of the United States. Were India to change its primary arms supplier from Russia to the United States, it could be a boon for the U.S. defense industry and a striking symbol of U.S.-India cooperation. But the difficulty of effecting such a change should not be understated, and, in addition, there may be a strategic rationale for the United States to desire that India continue to rely on Russian arms.

Arms trade between the quad partners must be considered in the context of each country’s overall arms imports and exports. Over the period 2005 to 2015, India was the world’s leading arms importer, Australia was 7th, the United States was 9th, and Japan was 18th. The value of arms imports from 2011-2015 in comparison to imports from 2006-2010 went up 90% in India, up 26% in Australia, down 9% in the U.S., and down 37% in Japan. To summarize, India is the world’s biggest arms importer and its imports are trending up, Australia and the United States are both significant arms importers whose arms imports appear relatively stable, and Japan is a relatively small arms importer whose imports appear to be trending down.

In terms of arms exports, over the same period 2005 to 2015, the United States was the world’s largest arms exporter, Australia was 23rd, India was 31st, and Japan was 53rd. The biggest two arms exporters, the United States and Russia, export many more arms than their nearest competitors. Together they accounted for 56% of the total value of arms sold between 2000 and 2015, and the value of U.S. arms exports in 2014 and 2015 was nearly twice that of Russian arms exports. The value of arms exports from 2011-2015 in comparison to 2006-2010 went up 83% for Australia and up 27% for the United States. They went down 6% for India, and Japan did not have a single arms export deal between 2011 and 2015. To summarize, Japan and India export almost no arms, Australia is a small arms exporter but its exports appear to be trending up, and the United States is the world’s largest arms exporter by a solid margin, with over 30% of the value of all arms exports originating from the United States.

If one assumes that the quad partners enjoyed a close arms trade relationship, then based on their respective overall arms imports and exports one would expect the arms trade between the quad partners to have three features: 1) the United States and Australia trading some number of arms with each other; 2) Japan importing a small number of arms from the United States and perhaps Australia; and 3) India importing large quantities of arms from the United States and some from Australia. Putting these hypotheticals up against the actual data highlights where the United States stands today in terms of the quad partnership as it is measured by the arms trade.

United States-Australia Arms Trade

There is a robust arms trade between the United States and Australia. Though Australia sold no arms to the United States between 2005 and 2010, it has sold the United States a steady stream of arms since 2011. Two-thirds of the total value of all Australian arms exports between 2000 and 2015 were from the sale of ships, a fact that is reflected in Australian arms exports to the United States. Australian shipbuilder Austal has been the vendor for the Joint High Speed Vessel program, through which the U.S. has leased and purchased catamarans designed as commercial ferries for military sealift. Austal has also been involved in the production of Independence-class littoral combat ships. However, the U.S. appetite for ships is limited—it only focused about 4% of the total value of its arms imports between 2005 and 2015 on ships.  

President Barack Obama and Prime Minister Julia Gillard (Independent Australia)

In terms of weapons flows in the other direction, Australia spent over 50% of the total value of its  arms imports between 2000 and 2015 on aircraft. About 60% of the total value of U.S. arms exports over the same period was for aircraft. It should not be surprising therefore that the sale of U.S. military aircraft to Australia has been substantial, headlined by the 2007 purchase of 24 F/A-18E Super Hornets. The full list of U.S. arms sales to Australia is robust, ranging from sensors to ship engines to SM-2MR surface-to-air missiles and M-1 Abrams tanks. In total, over half of Australia’s foreign arms purchases are sourced from the United States.

Japanese Imports from the United States and Australia

The strength of the U.S.-Japan security relationship is demonstrated by the fact that more than 90% of Japan’s arms imports between 2005 and 2015 came from the United States. Of the total value of Japanese arms imports, 50% was spent on aircraft, followed by (at roughly 10% each) engines, sensors, and missiles. Between 2000 and 2015, Japan bought more than 100 Blackhawk and Seahawk utility helicopters, dozens of Cobra and Apache attack helicopters, 42 F-35 Joint Strike Fighters, six KC-130Hs (tankers), three Global Hawk UAVs, four Hawkeye AEW&C aircraft, and 17 V-22 Ospreys. In terms of engines, Japan purchased GE turbines for its destroyers and helicopter carriers as well as GE turbofans for its jets. Its missile purchases have focused on SM-2 and SM-3 ship-based surface-to-air missiles designed for ballistic missile defense, as well as TOW anti-tank missiles. The volume of Japanese arms imports from the United States over the last decade has been more or less stable.

Japanese E-2C Hawkeye (JASDF Photo)

The history of Australian arms sales to Japan is much weaker. In 2014, Japan made its only purchase of Australian weapons since 2000—four Bushmaster armored trucks for troop transport. This speaks to a broader issue: Japan’s arms independence. It buys and sells many fewer arms than other countries with defense budgets of a similar size. South Korea is a useful point of comparison in demonstrating this since its defense budget is about 90% the size of Japan’s. Between 2005 and 2015, Japan spent less than half as much as South Korea buying arms from abroad. This suggests that Japan manufactures more of its own arms than South Korea, although data to verify this is not publicly available.

The story is similar when it comes to Japanese arms exports. Japan ended a self-imposed ban on exporting weapons only in 2014. Despite having the world’s 8th largest defense budget, the value of Japan’s arms exports between 2005 and 2015 was less than countries like Kyrgyzstan, Venezuela, Slovakia, and Syria. Over the same period, South Korea exported arms worth more than fifty times the value of Japan’s arms exports. It could take many years for Japan to become a major arms exporter and recent developments have not been especially promising. In April 2016, Japan lost an Australian contract for new submarines to France, and Japan has been haggling with India about selling it US-2 seaplanes for over two years. To what extent Japan is successful in becoming a major arms exporter  is a trend over which the United States will probably have limited influence.

As U.S. policymakers consider actions that would encourage or discourage this trend, there are tradeoffs in both directions. Europe is a useful point of comparison. On the one hand, the defense industries of the UK and France, among the most substantial in Europe, compete with U.S. companies for global market share. But on the other hand, France and the UK have some of Europe’s most capable militaries (arguably thanks in part to their more developed defense industries), meaning  that they are partners of greater potential military utility to the United States than a partner with a less capable military. On balance, the latter would seem to carry more weight.

Indian Imports from the United States and Australia: The Missing Link

Between 2005 and 2015, India bought roughly the same value of arms as the second and third (China and the UAE, respectively) largest arms importers combined. About one half of that went to aircraft, followed by roughly ten percent to armored vehicles, ships, and missiles. India acquired nearly three-quarters of the total value of its arms imports early over this period from Russia, making India the largest recipient of Russian arms over this period. The United States was the second largest source of arms for India, but accounted for just 9% of the total value. Australia’s arms sales to India between 2000 and 2015 were limited to a few patrol craft for the Indian Coast Guard, and Japan sold no arms to India. All of this means that India is the largest arms buyer of the three quad partners, but it buys far fewer of them from the United States than Australia or Japan because it buys so many Russian arms.

Japanese Minister of Foreign Affairs Fumio Kishida, U.S. Secretary of State John Kerry, and Indian External Affairs Minister Sushma Swaraj, September 2015.

Why does India buy so many arms from Russia and so few from the United States, Australia, or Japan? Possible explanations include a higher level of strategic trust with Russia, cheaper equipment, and a greater willingness by Russia to furnish offsets and technology transfers, due in part to a closer relationship between their arms producers and the government. Another major factor is inertia. Bureaucracies tend to return to the same buyers, military operators prefer a stable supplier of military hardware and major weapons systems take many years to procure. The inertia argument implies that India buys Russian arms today because it has bought Russian arms for more than fifty years; SIPRI data indicates that India made its first major purchases of arms from the Soviet Union in 1961.

India’s arms imports are the biggest divergence from what one would expect if the quad partners enjoyed a close arms relationship and the reality of their arms trade today. As mentioned, less than 10% of India’s arms imports between 2005 and 2015 came from the United States. For Australia and Japan, those figures are 64% and 92% respectively. This poses an important question for U.S. policymakers: as the U.S. pivots to Asia to balance China and looks to strengthen its relationship with India, the other major continental power, should the United States attempt to integrate India into its network of U.S.-supplied militaries?

In the last few years, the United States has sought to do just that, by strongly encouraging arms sales to India. The most prominent example of this is the Defense Trade and Technology Initiative within the Department of Defense, which is specifically tasked with looking for opportunities for U.S.-India defense trade. Companies have also hinted at a new willingness to make concessions in order to tap the Indian market. Lockheed and Boeing have offered to potentially move F-16 and F/A-18 production, respectively, to India. Because of how long arms sales take to manifest, a judgement on the success of these efforts cannot be rendered from SIPRI’s data, which goes only to 2015. But media reporting suggests that US efforts have been modestly successful at best. While it is still possible that India will make a major purchase of US-made fighter jets in the near future, the botched Medium Multi-Role Combat Aircraft competition demonstrates both the difficulty of working with the Indian procurement bureaucracy, as well as India’s reluctance to choose the United States as a supplier of major weapons systems.

U.S. efforts to sell arms to India in the coming years may also be made more difficult by trends in the global arms market. The rise of China as a major arms exporter threatens Russia’s position as the world’s number two arms supplier. India is the most important market for Russia’s arms exports—nearly one third of the value of Russia’s exports from 2005-2015 went to India—and Chinese competition could exacerbate this, making Russia even more keen to retain its share of the Indian arms market. On the other hand, Russia has begun selling arms to Pakistan, which could undermine its close arms relationship with India. But even if India reduced its purchases of Russian arms, this would not necessarily result in India buying more U.S.-made arms. Competition by European nations is fierce, and Japan and Australia could try to sell more arms to India. Most importantly, India is desperate to start producing more of its arms indigenously. Revitalizing India’s anemic arms industry is a key goal of Prime Minister Modi’s recent “Make in India” initiative.  

Prime Minister Narendra Modi and the "Make in India" Campaign (AP)

Becoming India’s main arms supplier would be a difficult, possibly impossible, challenge, and this may not even be in the best interest of the United States. Modern militaries and intelligence agencies expend enormous resources to learn about adversary weapons systems to devise countermeasures to defeat them. China does so in preparation for possible fights against Japan and Taiwan, whose arsenals contain mostly U.S.-made arms, and India, whose military is equipped mostly with Russian-made arms. The fact that China must be ready to fight militaries whose arms are from two different sources may impose greater costs on China (and therefore be preferable from the perspective of the United States) than if India were also using US-made arms.

Actions that impose costs on China serve the basic rationale for the quad partnership: to compete with China. Therefore, while the first instinct of U.S. policymakers has been (and likely will continue to be) to attempt to integrate India into the U.S.-led arms network, they should reconsider to what extent this is realistic and whether the status quo better serves U.S. interests. On the latter, the key question is whether an Indian military with U.S.-made arms, therefore more interoperable with the United States military, is more of a challenge for China than an Indian military with a suite of arms different from China’s other competitors. This question should be at the forefront of U.S. strategists’ minds as they continue to pursue the advancement of the quad concept in the Asia-Pacific.

Ben Lamont works for the American Academy for Strategic Education in Washington, DC. He studied South Asian Studies and Government at Harvard College.

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Header Image: President Obama and Prime Minister Narendra Modi in the gardens of Hyderabad House in New Delhi in 2015. (Jim Bourg/Reuters)


[1] The following is based on data from the SIPRI Arms Transfers Database. The database uses trend-indicator values (TIV) that “represent the transfer of military resources rather than the financial value of the transfer.”