Thailand - Country Commercial Guide
Defense and Security

This is a best prospect industry sector for this country. Includes a market overview and trade data.

Last published date: 2021-02-18

Overview

Thailand is highly dependent on foreign suppliers to procure military equipment.  Thailand’s import of defense equipment continues to increase every year as the country works to modernize its armed forces.  The U.S. is one of the largest sources of defense equipment for Thailand.  However, the Thai government plans to develop its domestic defense industry to reduce the country’s dependence on imports, promote technology transfer, and strengthen national security. Demand for military and defense equipment from allied countries, including the United States, remains high.

Security threats in Thailand include potential political unrest, occasional border disputes, domestic terrorist and separatist group activities in the troubled southern provinces, natural disasters, human smuggling, and illicit drug trafficking.

Since the economic crisis in the late 1990s, Thai defense budgets increased every year to maintain combat readiness, to neutralize the regional arms race among Associations of Southeast Asian Nations (ASEAN), and to modernize the country’s armed forces.

For 2020, the Thai government’s state budget is set at $160 billion. The government allocated 7.2% of the total fiscal budget to national defense, which amounts to approximately $7.7 billion, representing a 2.7%, or a $207 million increase from the previous year. An estimated 48% of the defense budget is assigned to the Royal Thai Army, 20% is given to the Royal Thai Navy, and another 18% to the Royal Thai Air force. The remaining funds are distributed to the Office of the Permanent Secretary and Defense Technology Institute (DTI) for research and development work.

 

2018

2019

2020

2021 (Estimated)

Defense Budget

 7,048.49

 7,326.66

 4,061.89

 4,224.36

Gross Domestic Product (GDP)

 518,267.74

 566,451.61

 544,483.87

 566,263.23

Defense Budget in% to GDP

1.36%

1.29%

0.75%

0.75%

Annual Increase

16.85%

3.95%

-44.56%

4.00%

$US Million

Leading Sub-Sectors

· Security and Safety Equipment (SEC)

· Airport and Ground Support Equipment (APG)

· Aircraft and Parts (AIR)

· Aviation Services (AVS)

Opportunities

Total defense spending by ASEAN countries has doubled over the past ten years, with major countries like Thailand showing an acceleration in military expenditure at high rates. In the past three years, Thailand placed additional focus on the procurement of helicopters, armored vehicles, and frigates to counter southern insurgency and strengthen its current military units. The Thai market requires more security solutions and advanced technology.  Demand is not just limited to security cameras, with an increasing demand for devices that can provide real-time information and utilize cloud data to recall archived information.

Government and military expenditures drive the Thai defense and equipment market, and increased budgets since 2014 expanded the market.  The factors that drive defense expenditures are the threat levels, equipment maintenance, replacement, and overhaul/refurbishment requirements. 

The Thai Ministry of Defense introduced military reform and a restructuring plan for 2017-2026.  The plan emphasizes research and development along with a focus on purchases of munitions, weapons, military vehicles, training aircraft, high technology electronics, and communication devices.  To upgrade its capabilities, the Thai military will invest in additional purchases of helicopters, armored vehicles, and utility vehicles to counter southern insurgency and strengthen its border security and current military units.

In addition, the Thai government plans to develop the domestic defense industry to reduce the country’s dependence on imports, promote technology transfer, and strengthen national security.

Web Resources

Ministry of Defence

Foreign Affairs Division, Office of Policy and Planning,

Tel: 662-225-7414, Fax: 662-226-1839

Royal Thai Armed Force Headquarters

Office of Policy and Plans, Directorate of Joint Operations,

Tel: 662-575-6203, Fax: 662-575-6067

Royal Thai Army

Policy and Plans DivisionDirectorate of Logistics

Tel: 662-297-7424, Fax: 662-297-7420

Defence Technology Institute(DTI), Ministry of Defence,

The Kingdom of Thailand

47/433, 4th Floor - Office of the Permanent Secretary of Defence Building. Changwattana Road., Pakkred, Nonthaburi 11120

Tel: +66 (0) 2980 6612-15, Fax: +66 (0) 2980 6688