Washington/IBNS: In the fiscal year 2023, the United States witnessed a significant surge in both Foreign Military Sales (FMS) and Direct Commercial Sales (DCS), marking unprecedented levels of international cooperation in the defense sector.
The annual report released by the Department of Defense provides detailed insights into the transactions between the U.S. and its allies.
Foreign Military Sales (FMS)
The total value of transferred defense articles, services, and security cooperation activities under the Foreign Military Sales system reached $80.9 billion, showcasing a 55.9% increase from the previous fiscal years $51.9 billion.
Breaking down the figures, $62.25 billion in arms sales were funded by U.S. ally and partner nations, while $3.97 billion came through the Title 22 Foreign Military Financing program.
An additional $14.68 billion was funded through various Department of State programs and Department of Defense Building Partner Capacity initiatives.
The three-year rolling average, spanning from FY2021 to FY2023, witnessed 21.9% increase, rising from $45.8 billion to $55.9 billion.
Government-to-government FMS sales notified to Congress in FY2023 include significant contracts with Poland, Germany, Australia, Canada, and Kuwait.
Poland in spree for its military build-up made some of the largest purchases.
Poland spent $12 billion on Apache helicopters, $10 billion on Himars artillery rocket systems, and $3.75 billion on M1A1 Abrams tanks.
With the goal of making Poland the most powerful land force in Europe, the previous conservative governments military modernization programme will continue, as pledged by Prime Minister Donald Tusk, reported BBC.
Direct Commercial Sales (DCS)
Privately contracted Direct Commercial Sales authorizations for FY2023 reached a total value of $157.5 billion, representing a 2.5% increase from the previous years $153.6 billion.
The three-year rolling average of DCS authorizations issued by the State Department also experienced a 2.5% growth, reaching $124.9 billion for FY2021-FY2023.
With a total of 23,474 licenses adjudicated, an increase of 6.0% from the previous year, and 14,445 licensed entities, demonstrating a 2.9% growth, the DCS sector is a pivotal component of U.S. defense exports.
Major Congressional Notifications in FY2023 included agreements with Italy, India, Singapore, South Korea, Norway, Ukraine, and the Kingdom of Saudi Arabia, covering diverse defense-related hardware and manufacturing.
It is crucial to note that current year numbers do not serve as predictive indicators for future year sales.
Fluctuations in foreign defense budgets, regional security concerns, and changes in technology and export controls may influence the trajectory of defense trade.
