The precision-guided munitions market is estimated to be USD 37.24 billion in 2025 and is projected to reach USD 49.71 billion by 2030, at a CAGR of 5.9%. The growing demand for PGMs is underpinned by a combination of strategic, operational, and technological advancements across defense forces globally. The deployment of PGMs offers multiple benefits, including enhanced strike accuracy, reduced collateral damage, and greater mission effectiveness in high-threat and complex environments. The integration of multi-mode guidance systems, networked targeting, and real-time sensor fusion enables dynamic engagement of both stationary and mobile targets, making PGMs indispensable for modern combat operations.
This report analyzes the military vehicle electrification market from 2023 to 2030. It discusses various industry and technology trends currently prevailing in the precision-guided munitions market and the factors that drive, restrain, and challenge its growth globally.
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Based on Technology: Guidance & navigation systems are expected to dominate the precision-guided munitions market. Guidance and navigation systems form the heart of what separates precision-guided munitions (PGMs) from conventional weapons. They are responsible for enabling a munition to consistently reach and hit its intended target, no matter the irregular and dynamically variable operational conditions. For this reason, they are not only functionally required but increasingly central to innovation in the PGM industry.
With the advent of the ever-more-challenged modern battlefield, speckled with electronic warfare, GPS denial, and time-sensitive or mobile targets, the requirement for sophisticated guidance technologies has expanded. Units that combine two or more navigation capabilities, such as inertial guidance, satellite-based systems, laser designation, or imaging sensors, offer higher mission success and dependability in a wide range of combat environments.
Further, the introduction of autonomous and network-guided weapons has placed a greater emphasis on smart guidance. These systems must analyze sensor information, adapt to dynamic target maneuvers, and integrate with broader command-and-control networks, all in real time. This functionality can be accomplished only by integrating sophisticated navigation and decision-making algorithms.
Based on Speed: The precision-guided munitions market, based on speed, has been segmented into subsonic, supersonic, and hypersonic. Supersonic precision-guided munitions are emerging as a strategic necessity since only they can produce high-speed, time-critical strikes with shorter warning and lower interception threat. With air defense systems increasingly hostile, the need for penetration-capable munitions with reduced engagement windows and greater survivability has become increasingly urgent. Supersonic PGMs fulfill these functions by significantly reducing the time frame during which targets can react or flee, and are thus extremely valuable in risk-exposed or contested areas.
These missiles are best utilized for missions like anti-ship missions, suppression of air defense, and destruction of high-value targets where speed and accuracy must be integrated. Their speed enables deeper penetration into hard targets and increases the kinetic energy at impact, thus leading to more effective missions without bigger warheads.
The shift towards mobile and dispersed threats also accommodates supersonic capability, given that these weapons are best suited to engage fleeting targets otherwise untargetable. As greater emphasis is placed on stand-off capability and fires beyond friendly troop ranges, supersonic PGMs provide a much-sought combination of range, speed, and accuracy that will fit into present military practice.
Based on Mode of Operation: Autonomous precision-guided munitions are expected to lead the market since they can fly without continuous human interaction, while providing quicker, smarter, and more responsive strike capability in more advanced combat theaters. The munitions use onboard processing, sensor fusion, and artificial intelligence to find, track, and engage targets with minimal outside guidance, setting them up for advanced warfare theaters that require quicker decision-making and reduced communications latency.
Autonomous PGMs are particularly useful in electronic warfare and GPS-denied environments, where conventional guidance systems can be compromised. By processing real-time sensor information and adjusting their flight trajectories mid-course, these systems retain effectiveness even in extremely contested battlespaces. Their ability to autonomously detect and prioritize targets enables engagement of moving, time-sensitive, or dynamically re-prioritized threats, greatly increasing operational agility.
Based on Region: The precision-guided munitions market has been segmented into North America, Europe, Asia Pacific, the Middle East, and the Rest of the World (RoW). The market in Asia Pacific is projected to grow at the highest rate during the forecast period. The Asia Pacific region will see the highest growth rate in the global precision-guided munitions market over the next decade, based on a combination of strategic security interests, military modernization, regional tensions, and rising defense spending. This dynamic and fast-evolving defense situation is fueling high demand for precision, scalable, and operationally flexible advanced munitions.
Among the growth drivers are increased geopolitical tensions in the Indo-Pacific and around and within the South China Sea, Taiwan Strait, and Korean Peninsula. This is prompting regional leaders such as India, China, Japan, South Korea, and Australia to increase their extended-range precision-strike capabilities. Precision-guided munitions offer a means of projecting power at stand-off ranges, enhancing deterrence, and striking with minimal collateral damage, which are important in contested and politically sensitive environments.
Additionally, countries in the Asia-Pacific are undertaking full-scale military modernization programs, some of which involve smart munitions as the primary focus. India, for example, is undertaking the design and integration of air-launched and surface-to-surface PGMs such as laser-guided bombs, guided artillery rounds, and smart anti-ship missiles. Similarly, Australia’s modernization through its Defence Strategic Review entails investing in long-range precision fires and sovereign missile manufacturing.
In addition to indigenous development, the region is increasingly witnessing augmented international defense collaboration and technology transfers. South Korea and Japan are joining forces with Western defense companies to place PGMs on fighter jets, naval ships, and missile defense systems. The rapid proliferation of 4.5 and 5th-generation fighter aircraft in the region, like the F-35, Rafale, and regionally produced platforms, also generates a need for air-launched PGMs with improved targeting and navigation capabilities.
The Asia-Pacific region is also distinctly noted for the diversity of threat environments—from conventional military threats through border wars, sea territorial disputes, and asymmetric conflict. Diversity here requires a diverse mix of PGM types, from short-range laser-guided missiles to tactical missiles, anti-ship PGMs, and guided artillery, a greater addressable market than areas with only a few operational issues.
Apart from this, escalating defense expenditures and higher-level political involvement in domestic production are inspiring buying. Not only are governments purchasing PGMs through foreign military sales, but they are also propelling local production under initiatives such as India’s “Make in India” and South Korea’s defense export campaign, boosting Indigenous capability and reducing reliance on imports.
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Finally, Asian-Pacific nations are investing in next-generation technology such as AI-targeting, loitering munitions, swarming systems, and electronic warfare-resistant navigation, all of which are being integrated into future PGMs. This focus on development and push-button fielding makes the region a fertile ground for regional and foreign producers alike to expand.
In short, an intersection of strategic imperatives, technological leapfrogging, geopolitical instability, and industrial ambition prepares the Asia Pacific region to be a leader in PGM market growth, in terms of volume of purchasing and technology leadership.