Thailand’s Defence Sector: Embracing Technology Transfer And Modernization For Self-Sufficiency

In a dynamic landscape shaped by geopolitical complexities and regional challenges, Thailand is steering its defence sector towards self-sufficiency.

Thailand’s National Security Strategy focuses on ensuring combat readiness to protect the nation, enhancing the armed forces to safeguard its interests, mitigating the regional arms race within ASEAN, and modernizing the military. Despite being the second-largest economy in Southeast Asia, Thailand has maintained a consistent defence budget of around USD 6 billion during the COVID-19 pandemic, expected to rise to USD 7 billion afterwards.

Key drivers of the defence and security industry include issues such as illegal immigration, periodic border conflicts, ongoing insurgency violence in southern provinces (Pattani, Yala, Narathiwat), and threats of political unrest in Bangkok and other parts of the country. The reallocation of defence funds to address the pandemic has affected Thailand’s defence and security sectors.

The government aims to boost the domestic defence industry to decrease reliance on imports, encourage technology transfer, and enhance national security. There is a sustained demand for military equipment from allied nations, with the United States being a significant supplier of defence equipment to Thailand.

In 2023, the Thailand defence budget has been reported at $4.5 billion, and it is projected to experience a Compound Annual Growth Rate (CAGR) of over 5% from 2024 to 2028. This growth is primarily attributed to an expected increase in the acquisition budget, driven by the procurement of aircraft, submarines, and naval vessels. Despite facing regional challenges and internal pressures, the forecast indicates a promising CAGR of 5.8% in the upcoming years, reaching an estimated $6 billion by 2028.

In the context of geopolitical complexities and resurgence in the domestic economy, Thailand’s Navy, Air Force, and Army are gearing up for modernization efforts. This presents favourable opportunities for foreign defence companies to collaborate and enter the Thai defence market.


Policy Reforms

In the arena of defence procurement, policy reforms in Thailand are instigating significant changes. The proposal put forth by Thailand’s Future Forward Party, advocating the inclusion of civilian entities and journalists in the procurement process, underscores a commitment to transparency and oversight. This initiative aims to minimize the potential for irregularities and enhance accountability in defence acquisitions.

Simultaneously, the implementation of an offset policy is encouraging foreign investors to engage in partnerships with local firms. This approach not only incentivizes collaboration but also serves to augment the capabilities of the domestic defence industry. By fostering these alliances, Thailand aims to reduce its dependence on imports, promoting the growth and self-sufficiency of its indigenous defence sector.


Collaborations and Exhibitions

Foreign defence companies eyeing Thailand’s defence market have various strategic entry points to consider. These include engaging in government-to-government transactions, forming collaborations with domestic players, and participating in defence exhibitions such as the Asian Defense and Security Exhibition. These avenues provide opportunities for foreign companies to interact with key decision-makers and officials in the Thai defence sector.

The transformation of U-Tapao International Airport into an aerospace hub underscores the Southeast Asian country’s intent to attract foreign investment and technological expertise. This initiative signals Thailand’s commitment to fostering a conducive environment for international defence companies, aiming to leverage their expertise and contribute to the development and modernization of the country’s defence capabilities.


Thailand Defence Strategies

The security sector has played a fundamental role in Thailand’s development, with the Royal Thai Armed Forces (RTAF) serving as key actors. Thailand’s comprehensive military doctrine addresses a wide range of security concerns and emphasizes the deployment of robust military capabilities. Under the current military-controlled government, policies have been prioritized to stimulate consumption and investment, leading to increased public spending on defence and infrastructure. Efforts have also been made to enhance the regulatory framework, making it more efficient and transparent to attract investment and integrate the economy into the global marketplace.

The Thai military and defence agencies shape the National Security Strategy, with a primary focus on the acquisition of military equipment to modernize and enhance military capabilities. Notably, following high-level visits of Thai military government officials to the United States in late 2017 and early 2018, prospects for further equipment acquisitions are likely, reflecting the cooperative military relationship between the two countries.



Thailand’s policy focus in the defence sector centres on technology transfer and defence modernization, aiming to enhance defence capabilities by promoting the local defence industry. This emphasis on the local defence industry is integrated into the 20-year national strategy outlined in the 12th National Economic and Social Development Plan. The Thai defence industry holds strategic importance as one of the twelve ‘S-curve’ industry sectors within Thailand’s Eastern Economic Corridor (EEC) initiative. This initiative includes the establishment of the Defense Industrial Zone (DIZ) to foster self-sufficiency in defence equipment infrastructure through a Public-Private-Partnership (PPP) involving the Thai government, and local, and foreign companies.

Government and military expenditures are key drivers of the Thai defence and equipment market, and increased budgets since 2014 have contributed to its expansion. Factors influencing defence expenditures include threat levels, equipment maintenance, and requirements for replacement, overhaul, or refurbishment. There is potential for further growth in the Thai military budget, given that it has been below two per cent of the national GDP. A noteworthy aspect of growth in the Thai defence industry is the focus on unmanned vehicles for military applications, presenting opportunities for sales and joint development of unmanned platforms for air, land, and sea applications.

Additionally, the Thai Ministry of Defense has introduced a military reform and restructuring plan covering 2017 to 2026. This plan emphasizes research and development and underscores the importance of acquisitions in munitions, weapons, military vehicles, armed training aircraft, electronic warfare, air-defence radars, and communication devices. To upgrade military capabilities, there are plans for additional purchases of helicopters, armoured vehicles, and utility vehicles, with a specific focus on countering a southern insurgency and strengthening border security.