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Indonesia Defense Market Companies Summary

The Indonesian defense market, despite facing economic impacts due to COVID-19, continues to grow due to the country's push for modernization of its defense systems. The changing geopolitical climate and maritime disputes have led to the enhancement of the country's defense arsenal. Large-scale upgrades and replacements of aging defense systems are being considered to effectively respond to the strategic environment. The growth of the market is driven by the country's procurement plans aimed at enhancing its indigenous defense manufacturing capabilities. Local firms are investing in the development of new generation weapon systems and platforms, while the government is focusing on enabling technology transfer partnerships between foreign and local entities to improve the capabilities of the latter. Indonesia has been working on defense modernization for over a decade, with a particular focus on strengthening its naval vessel fleet. The country is embarking on a program to modernize its naval fleet and construct a more effective deterrent to future incursions. In the past, Indonesia has been dependent on foreign defense contractors for the procurement of major military equipment, but recent years have seen a shift towards developing its state-owned companies. Recent multi-million-dollar contracts from the government have helped local companies prosper, although budget constraints may hamper growth opportunities in the near future. Close relationships with other Asian countries have helped the country's defense industry grow and contribute to the economy through exports. Joint defense production plans could further enhance the local defense industry supply chain in the future, providing significant growth opportunities for defense companies in the Indonesian defense market.