Overview

According to the Stockholm International Peace Research Institute (SIPRI), Vietnam has implemented one of the largest increases in military expenditures in Southeast Asia. Vietnam’s defense budget experienced notable growth between 2003 and 2018, with defense spending increasing nearly 700%, from $841 million in 2003 to $5.5 billion in 2018. In 2024, Vietnam allocated approximately $8.5 billion toward its defense budget, with goals to surpass $10 billion by 2029. 

Maritime domain awareness and maritime security are key areas of focus for Vietnam’s defense procurement and activities. This encompasses air, surface, and subsurface capabilities. Defense equipment suppliers and subcontractors can expect increased demand from end users of naval, aerial, and intelligence, surveillance, and reconnaissance (ISR) equipment. 

Vietnam Defense Policy and International Engagement

According to the Vietnam Defense White Paper in 2019, Vietnam maintains a non-aligned policy known as the “four no’s”, which calls for no military alliances; no siding with one country against another; no foreign military bases or use of Vietnamese territory to oppose other countries; and no use of force or threat of the use of force in international relations. However, Vietnam’s military does maintain some flexibility in its international security engagements, depending on its national security interests. 

The strategy also demonstrates Vietnam’s steadfast stance on territorial sovereignty and maintaining regional stability. Modernization of the military calls for a diversification of Vietnam’s international defense partnerships in order to more adequately address the shared challenges in the region and around the globe. Vietnam is seeking to reduce reliance upon a sole supplier of defense equipment and material and is actively seeking new partners, updated equipment, and new technology. Ultimately, Vietnam aims to enhance its domestic defense industrial base. 

As Vietnam has a 2,000-mile coastline, overlapping territorial claims in the South China Sea, and a thriving marine economy, the Government of Vietnam has placed great emphasis on maritime defense and security. In 2011, Vietnam issued a detailed maritime strategy for 2011–2020, making the protection of its maritime sovereignty and maritime economy a key national security pillar. Resolution 36 in 2018 again emphasized that the sustainable development of the marine economy associated with national defense is a priority for Vietnam’s economic development in 2030–2045. The Vietnamese Navy and Air Force have traditionally had very little capacity to protect Vietnam’s maritime interests, but over the past decade, both services have undergone modernization efforts. 

In addition to maritime priorities, in February 2021, Vietnam’s National Assembly approved a plan to modernize Vietnam’s armed force by 2030 with a compact and strong People’s Army and People’s Public Security, with priority given to the following forces and departments: Air, Navy, Coast Guard, Signal, Electronic Warfare, Technical Reconnaissance, and Cyber Warfare. Vietnam also made legal amendments to expand the procurement of equipment for the Ministry of Public Security’s Mobile Police, enabling them to acquire aircraft and ships in addition to weapons, explosives, vehicles, and other equipment.

Since the United States formally announced the lifting of the ban on arms sales to Vietnam in May 2016, U.S. firms have seen growing interest in U.S. technologies, equipment, and expertise. Similarly, there has been a deepening of bilateral defense cooperation. In March 2018, U.S. aircraft carrier USS Carl Vinson paid a historic visit to Da Nang, and the U.S. has transferred twenty-four new fast-response Metal Shark patrol boats to Vietnam’s Coast Guard. More defense articles from the U.S. have been acquired or transferred to Vietnam, including six Boeing ScanEagle UAVs ordered in 2019, 12 Beechcraft T-6C Texan II trainer aircraft delivered in 2025, and three decommissioned U.S. Coast Guard Hamilton-class high endurance cutters to the Vietnam Coast Guard. Additional areas of defense and security cooperation include institutional capacity building, cyber defense, maritime domain awareness, peacekeeping operation training, military medicine, and English language training.  

Major local players

The Ministry of National Defense and the Ministry of Public Security are responsible for developing procurement requirements of imported defense and security equipment for the review and approval of the Prime Minister. The approved list is later assigned to relevant defense and security units for the implementation of procurement processes and contract awards. 

As regulated by the law, enterprises eligible to do business in the defense and security sectors are limited to two categories: 

• State-owned enterprises under the Ministry of Defense or Ministry of Public Security, which are tasked with defense production and procurement planning.
• Private companies that receive permits or written approval issued by the Ministry of National Defense or the Ministry of Public Security to import and trade predefined products.

Leading Sub-sectors

Although the majority of Vietnam’s armed forces require modernization of aging equipment, Vietnam People’s Navy and the Air Defense Air Force will likely continue to receive the majority of future investments. 

Maritime Capabilities

Vietnam has demonstrated interest in developing and equipping its naval forces with maritime anti-access/area denial (A2/AD) and surveillance capabilities through the purchase of submarines, coastal high-speed patrol vessels, stealth frigates, and anti-submarine warfare capabilities, as well as anti-ship ballistic missiles and other coastal capabilities that serve both law enforcement and military purposes.

The Vietnam Coast Guard (VCG) also receives great attention and investment from the Vietnamese government’s modernization efforts. Instead of building large naval ships, Vietnam has prioritized equipping the VCG with high-speed, mobile, large patrol ships capable of operating offshore for long hours and under harsh weather. In addition, aircraft that can provide wide surveillance in the maritime domain are also a priority.

Air Force

Vietnam has been enhancing its air force capabilities since 2011. Fighter aircraft, multi-role fighter jets, transport aircraft, unmanned aerial vehicles (UAVs), anti-submarine and maritime surveillance aircraft, and electronic warfare aircraft are considered essential to modernize and strengthen Vietnam’s air force. Currently, most of Vietnam’s military aircraft are from Russia, Poland, France, or the Czech Republic. Therefore, U.S. suppliers seeking to enter the market will need to invest resources to educate and familiarize MND officials and end-users with offerings related to aircraft, training, technical assistance, and equipment maintenance. Given the global security environment, the Air Force has also indicated interest in evolving Counter UAV technology.

Information Communications Technology and Electronic Warfare

Military information, communication, and electronic warfare solutions are among the top priorities in Vietnam’s military modernization plan. Given the vital role of information communication systems in maintaining real-time, effective, and secure communications during military operations, Vietnam is allocating resources to develop and import high-tech equipment for this subsector. With the growing importance of electronic warfare in modern conflict, MND is also taking steps to equip its military force with state-of-the-art products, especially upgrading its C4ISR (Command, Control, Communications, Computer, Intelligence, Surveillance and Reconnaissance) capabilities.  

Opportunities

U.S. defense products have a long-standing reputation for cutting-edge technology, high precision, and durability. U.S. defense and security suppliers are competitive in areas that require tailored or high-performing technology, including maritime domain awareness, aerial defense, anti-access/area denial capabilities, surveillance equipment, C4ISR, and electronic warfare solutions. A full-package approach emphasizing an effective sustainment program and follow-on technical assistance would pay dividends in the long run and pave the way for future procurements. With Vietnam’s push for self-reliance, the Ministry of National Defense is also interested in co-assembly and co-production opportunities.

Events

Vietnam International Defense Expo: In December 2022, the Ministry of National Defense organized its inaugural Vietnam International Defense Expo (VIDEX), offering an excellent opportunity for foreign OEMs, system integrators, assemblers, and service providers to introduce state-of-the-art equipment, weapons, and technologies to the Vietnam market. VIDEX occurs bi-annually and has seen attendance from over 150 companies from approximately 30 countries. In 2024, VIDEX offered Vietnam a chance to share its defense requirements and attract global attention, amid its continued military diversification efforts. The expo hosted the first-ever U.S. pavilion, with U.S. firms of all sizes participating to display their equipment and explore collaboration opportunities with Vietnam. The next Vietnam International Defense Expo is expected to be held in Hanoi in December 2026.
 

Resources
•    Vietnam Ministry of National Defense
•    Vietnam Ministry of Public Security
•    People’s Army Newspaper
•    Stockholm International Peace Research Institute
 

For more information about the Vietnamese Defense and Security industry, please contact:
Nhung Nguyen, Commercial Specialist
U.S. Commercial Service Hanoi
E-mail: nhung.nguyen@trade.gov

Ngan Thai, Commercial Assistant
U.S. Commercial Service Hanoi
E-mail: ngan.thai@trade.gov

Nga Hoang, Commercial Specialist
U.S. Commercial Service Ho Chi Minh City
E-mail: nga.hoang@trade.gov