Overview
Peru faces limited threats from other states. However, the Armed Forces play a vital role in countering domestic terrorism, mainly in the central region, participating in international interoperability exercises, and in some circumstances supporting the Peruvian National Police. This creates substantial demand for safety and security equipment. Peru lacks a robust domestic defense industry, and so needs to import vital military equipment and platforms, especially advanced air and naval systems.
Peru grapples with serious internal security threats stemming from high crime rates and violence associated with organized narcotics cartels and drug trafficking. Businesses incur heavy costs for protective measures due to inadequate law enforcement and corruption, which also impairs the justice system. Crime rates have been rising with increasing homicide, burglary, cargo theft, and extortion affecting companies across sectors.
Opportunities
Peru’s presents opportunities for safety and security equipment and services providers. While Peru produces some small arms and modest naval vessels, the country is unable to manufacture major military platforms and systems locally and the government currently has no plans to develop an indigenous industry. Meanwhile, defense spending is expected to increase in the medium-to-long term and Peru will need to purchase advanced equipment such as aircraft, vehicles, electronics, and missiles. This is likely to lead to a number of opportunities for international defense contractors to meet Peru’s military modernization needs.
Peru’s vulnerability to crime persists due to institutional deficiencies. As businesses confront violent threats absent reliable public security forces, this also presents a growing market for private security services and equipment. U.S. firms can capitalize on the heightened commercial demand for arms and defense technologies to protect companies with private guards, armored vehicles, and surveillance systems.
| 2020 | 2021 | 2022 | 2023 (projected) | |
| Defense expenditure | 2,543.20 | 2,640.60 | 2,828.90 | 2,924.40 |
| Annual Percent Change | -4.4 | 3.8 | 7.1 | 3.4 |
| As Percent of GDP | 1.2 | 1.2 | 1.1 | 1.1 |
Challenges
While Peru’s defense spending is expected to increase, it remains somewhat constrained at just over one percent of GDP according to Peru’s Ministry of Economy and Finance. Furthermore, despite expected economic growth and higher export earnings, procurement will likely continue to be impacted by protests and arduous rules and regulations. Internal terrorism threats will compel equipment purchases to boost security. However, with a restricted budget, Peru may be unlikely to pursue major acquisitions, instead focusing on upgrading and refurbishing existing arms, thus limiting the market for big-ticket platforms and systems. Peru’s tight finances may also lead to price sensitivity, as affordability continues to be a key factor in procurement decisions. Therefore, companies may have to offer cost-effective solutions tailored to Peru’s budget realities. Protests and unrest pose additional challenges, as they can disrupt supply chains and timelines. Firms will need strong local partnerships and clear strategies to navigate Peru’s complex environment. Though the market holds long-term potential, near-term growth is likely to be modest.
Key Industry Events
Sitdef 2025: The largest Safety, Security and Disaster Relief Trade Show in Peru held every two years at the San Borja Army Base in Lima, Peru.
Sitdrone 2024: The largest exhibition catering to drone manufacturers.
Resources
Global Trade Atlas: www.gtis.com/gta/
Ministerio del Interior (Ministry of the Interior): www.gob.pe/mininter