Report

The Tactical UAV Market size is estimated at USD 5.03 billion in 2024, and is expected to reach USD 8.55 billion by 2029, growing at a CAGR of 11.21% during the forecast period (2024-2029).

The impact of the COVID-19 pandemic on the defense industry was considerably low. However, in the defense sector, the pandemic led to disruptions in the supply chain. This was caused by lockdowns in some countries, which led to delays in the delivery of the final products. Nevertheless, the investments in the procurement and development of new tactical UAV systems remained unaffected.

Recent years have proved that technological advancements and trends in newer-generation tactical UAVs are unlikely to stop and will experience accelerating growth in the coming years. To succeed in critical military missions, real-time information can prove to be the most powerful weapon for warfighters, commanders, and troops to protect themselves. Hence, tailoring their response to the threat requires superior tactical intelligence, surveillance, and reconnaissance. This is generating the demand for tactical UAVs from the armed forces across the world.

Several UAV manufacturers are developing newer generation tactical UAVs with an advanced payload of electro-optical or infrared sensors, with capabilities to transmit live video and other invaluable information that can empower troops. Recently, China unveiled an unidentified jet UAV and a tactical UAV designed for electronic warfare and countermeasure purposes.

Demand is also higher for developing ISR payloads that are lightweight and have faster processing capabilities. The use of UAVs by the United States for national security and counter-terrorism, along with the possession of the largest technologically advanced fleet of military UAVs by the United States Department of Defense, is a prime factor for the largest market share of the North American region.

Tactical Unmanned Aerial Vehicle (UAV) Market Trends

The Military Segment is Anticipated to Lead the Market During the Forecast Period

The increasingly diverse military applications and the requirement for highly effective and objective surveillance and reconnaissance for some of the most critical military applications are driving the highest demand from the military applications segment of the market.

The increasingly diverse military applications and the requirement for highly effective and objective surveillance and reconnaissance for some of the most critical military applications are driving the highest demand from the military applications segment of the market. With increasing global unrest due to the ongoing conflicts between major global military superpowers, several militaries are focusing on expanding the fleets of their tactical UAVs to counter any adversary actions from enemies successfully.

Tactical UAVs are critical to ensure uninterrupted surveillance at the borders. Due to its diverse application profile, the demand for tactical UAVs has witnessed a multifold increase during the last decade. Hence, several procurements are underway or being placed to cater to the increased demand from global military forces. For instance,

In May 2022, Switzerland announced it had received the first two of six Elbit Systems' Hermes 900 unmanned aerial systems from Israel. The country will receive four other drones by the end of 2023. Furthermore, border patrol and air surveillance are other critical areas of application for these drones, driving the demand for tactical drones. For instance,

In March 2022, Saudi Arabia's Intra DefenceTechnologies unveiled its Samoomtactical MALE UAV, with the design to be optimized for intelligence, surveillance, and reconnaissance tasks. The Saudi Armed Forces anticipated becoming the first customer of the drone. In October 2022, to bolster the surveillance system on the northern border, the Indian Army floated tenders to procure 750 remotely piloted aerial vehicles or drones along with complete accessories through a fast-track procedure under emergency procurement.

Such developments are expected to drive the market for tactical UAVs in the military sector in the years to come.

Asia-Pacific Region to Experience the Highest Growth during the Forecast Period

The Asia-Pacific region is expected to register the highest growth rate and demand during the forecast period due to increasing R&D activities and increasing procurements by countries in the region. The increased purchase of drones for major tactical applications has increased the demand from various countries involved in developing these drones. The rising emphasis on effective border patrol and maritime patrol used by naval forces has increased the demand for tactical drones to be used in these applications. In June 2022, the Taiwan Army purchased 50 short-range tactical UAVs to improve joint battalion reconnaissance capabilities.

The Army prepared a budget of NTD 779.98 million (USD 26.5 million) from 2020 to 2023 to buy 14 UAVs in 2022 and 36 sets in 2023. Furthermore, Japan has also resumed its plan to procure Northrop Grumman's RQ-4 Global Hawk Drone in a deal worth USD 528 Million in January 2022. The RQ-4 Global Hawk is a High-Altitude surveillance drone to be stationed at the ASDF Misawa Air Base in Japan. Currently, the Indian Defense forces now possess more than 200 Searcher and heron UAVs which have been developed by Israel. Moreover, the Indian defense ministry is in plans to buy high-tech unmanned aerial vehicles (UAVs) to strengthen its intelligence, surveillance, and reconnaissance (ISR) capabilities and improve the effectiveness of its military operations.

In 2022, the Rustom- 2 also known as Tapas -BH tactical airborne platform for airborne surveillance beyond the horizon developed by the Indian Defense Research and Development Organization, DRDO, reached The Target Altitude Of 28,000 feet. This development will lead to India no longer needing to import tactical drones for carrying out intelligence, surveillance, and reconnaissance missions. In recent times, 76 Tapas drones have been ordered (sixty for the Indian Army as well as twelve for the Indian Navy). The first delivery has been scheduled for 2023 and will be developed with the collaboration of HAL and DRDO.

Moreover, India's tactical UAVs are currently being developed on a huge scale to support tactical units with very short ranges. In 2022, according to a statement issued by the Chief of Naval Staff, India is in plans to procure 30 MQ-9B Predator armed drones at a cost of over USD 3 billion. Moreover, In 2020, the Indian Navy took on lease two MQ-9B Sea Guardian drones from General Atomics for one year for surveillance in the Indian Ocean. The lease period has been extended subsequently.

Tactical Unmanned Aerial Vehicle (UAV) Industry Overview

The market of tactical UAVs is highly fragmented, with several providers and UAVs that can be used for tactical and ISR missions. The key players in the market are The Boeing Company, Lockheed Martin Corporation, Northrop Grumman Corporation, Elbit Systems Ltd, and AeroVironment Inc. These players are all major international companies trying to expand their presence and product portfolio by adopting different strategies. Several UAV manufacturers are developing newer generation tactical UAVs with advanced payloads of electro-optical or infrared sensors and capabilities to transmit live video and other invaluable information that can empower troops. The growing focus on the indigenous development of tactical UAVs is anticipated to help the advent of new players in the market. In recent years, several smaller players have constantly grown their market presence. They are expected to play a critical role in the future as their technology matures and gains flight hours while building technologies and capabilities made for their local users, including both military and non-military customers.

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