The Takshashila Institution, a Bengaluru-based think tank focused on strategic studies, has released an analysis questioning whether China's defence industry should pivot from chasing new export deals to prioritising the retention of existing customers. The assessment arrives as Beijing confronts growing challenges in maintaining its position in the global arms market amid intensifying competition from Western suppliers and shifting geopolitical alliances.
The Retention Problem Takes Centre Stage
According to the Takshashila analysis, China's defence sector faces a fundamental strategic dilemma. While Beijing has invested heavily in expanding its weapons manufacturing capacity and marketing efforts across Asia, Africa, and the Middle East, customer satisfaction with Chinese military hardware has become increasingly difficult to sustain. The think tank's researchers argue that maintaining client relationships requires more than competitive pricing — it demands reliable after-sales support, consistent spare parts supply, and technology upgrades that many Chinese firms have struggled to provide consistently.
The challenge stems partly from the nature of Chinese defence exports, which often target countries seeking affordable alternatives to Western or Russian equipment. Nations operating Chinese-made fighter jets, naval vessels, or air defence systems frequently encounter bottlenecks when seeking maintenance training, technical documentation, or system modernisations. Anushka, one of the analysts contributing to the Takshashila assessment, noted that these gaps erode trust over time and make clients vulnerable to offers from competing suppliers.
Competition Intensifies Across Multiple Fronts
The global defence market has grown more crowded as countries develop indigenous arms industries. South Korea, Turkey, and several European nations now actively compete for contracts that China traditionally targeted. Western governments have also sharpened their marketing efforts, offering not just hardware but long-term security partnerships, technology transfer agreements, and political support that Beijing cannot always match.
Meanwhile, Russia's own defence industry — historically a dominant player in the market China now occupies — has faced disruptions from international sanctions and production constraints following its invasion of Ukraine. Some analysts expected this to create openings for Chinese arms exporters, but the Takshashila analysis suggests the opposite may be occurring. Countries reconsidering their Russian equipment fleets are often looking toward Western or allied solutions rather than simply switching to Chinese alternatives.
The Spare Parts Dependency Trap
One of the most concrete challenges identified in the analysis involves the supply chain dependencies that Chinese equipment creates for purchasing nations. When countries acquire Chinese radar systems, missiles, or aircraft, they often become reliant on Beijing for specialised components. This dependency creates leverage for China but also liability — if supply chains are disrupted or if political relationships sour, client nations face operational gaps that are difficult to resolve quickly.
The think tank pointed to documented cases where countries operating Chinese military hardware experienced extended equipment downtimes while waiting for components or technical assistance. These delays can have direct consequences for national security, making governments wary of deepening their reliance on Chinese defence suppliers.
What Beijing Stands to Lose
If China fails to address customer retention effectively, the costs extend beyond lost revenue. Each country that abandons Chinese equipment represents a setback to broader strategic objectives. Defence relationships often open doors for diplomatic influence, intelligence access, and long-term economic partnerships. Losing a client to a Western or rival supplier can diminish Beijing's footprint in regions it has worked to cultivate.
The Takshashila analysis estimated that China has exported defence equipment to approximately 50 countries over the past two decades. Maintaining productive relationships with even a portion of these customers requires sustained investment in support infrastructure that the think tank suggests is not keeping pace with export volumes.
The Case for Shifting Strategy
The think tank's recommendation centres on a reorientation of priorities. Rather than concentrating resources on securing new customers — a costly and uncertain endeavour — Chinese defence firms should invest in deepening relationships with existing clients. This means establishing more robust service centres abroad, training local personnel, and ensuring spare parts availability does not become a political tool used at inconvenient moments.
Such a shift would require coordination between China's defence manufacturers, the government agencies that oversee arms exports, and the banking institutions that often finance these deals. The Takshashila assessment noted that competitors who excel in customer retention tend to treat after-sales support as a core business function rather than an afterthought.
Broader Implications for Global Defence Trade
The dynamics at play in China's defence sector reflect larger trends reshaping the international arms market. The era of straightforward customer relationships, where nations purchased equipment from established suppliers and managed the consequences themselves, is giving way to more complex ecosystems of service, upgrades, and interoperability considerations. Countries are increasingly evaluating potential suppliers based on the entire lifecycle of equipment, not just the initial purchase price.
For India, the analysis carries indirect relevance. New Delhi operates a mix of Russian, French, Israeli, and domestically produced military equipment, and its own defence industry has ambitions to become an exporter. The challenges China faces in customer retention offer a case study in what not to do — and potentially create openings for Indian firms targeting similar markets with different value propositions.
What comes next for Beijing's defence strategy will become clearer as the next round of arms export decisions unfold in Southeast Asia and the Gulf region over the coming months. Analysts will be watching whether Chinese firms announce expanded service capabilities or continue prioritising deal volume over customer loyalty.
See Also
- Delhi Police Tightens Grip on BJP HQ Amid Terror Jitters
- Man Catches Falling Girl From Window — Credits India Cricket Training for Saving Her
Broader Implications for Global Defence Trade The dynamics at play in China's defence sector reflect larger trends reshaping the international arms market. The Takshashila analysis estimated that China has exported defence equipment to approximately 50 countries over the past two decades.
