Russia now second-largest global arms producer, overtaking UK

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Russia's arms industry has become the second-largest in the world, knocking the UK into third place, according to a new report by the Stockholm International Peace Research Institute.

(CNN) — Russia's arms industry has become the second-largest in the world, knocking the UK into third place, according to a new report by the Stockholm International Peace Research Institute (SIPRI).

Russian companies in the SIPRI Top 100, an index of the largest arms-producing and military services companies in the world, made 9.5 percent of total arms sales in 2017.

The U.S. ranks first, with 57 percent of total arms sales, and the UK was pushed into third with 9.0 percent.

The SIPRI Top 100 contains 10 Russian companies that increased arms sales by a collective 8.5 percent in 2017 to $37.7 billion.

"Russian companies have experienced significant growth in their arms sales since 2011," Siemon Wezeman, a senior researcher at SIPRI, said in a press release. "This is in line with Russia's increased spending on arms procurement to modernize its armed forces."

These companies have no competition in the Russian market and have benefited from increased military spending as President Vladimir Putin modernizes the country's armed forces, Wezeman told CNN in an email.

The trend for increased spending came to a halt in 2017, however, when Moscow spent 3.9 trillion rubles ($61 billion) on defense, a 17 percent decline from the previous year and the first annual drop since 1998, according to previous SIPRI data.

That downturn is a sharp reversal from previous years, when Russia ramped up investment as part of an effort to update outdated military systems by 2025.

But Russian arms exports remain high and several newly enlarged companies have made it into the top 100, said Wezeman.

Total arms sales for the Top 100 rose 2.5 percent compared with 2016, to $398.2 billion -- this represents 44 percent growth since comparable data was first collected in 2002.

These figures exclude Chinese companies, for which data is not available.

Other important developments include a 24 percent increase in arms sales for Turkish companies in 2017.

"This significant increase reflects Turkey's ambitions to develop its arms industry to fulfil its growing demand for weapons and become less dependent on foreign suppliers," said Pieter Wezeman, a senior SIPRI researcher, in a press release.

There are 42 U.S. arms companies listed in the Top 100 -- they saw collective sales growth of 2.0%, to $226.6 billion.

"U.S. companies directly benefit from the U.S. Department of Defense's ongoing demand for weapons," said Aude Fleurant, director of SIPRI's Arms Transfers and Military Expenditure Programme, in a press release.

Lockheed Martin maintained its position as the world's largest arms producer, with sales of $44.9 billion in 2017, according to the report.

The U.S. defense budget was on the agenda in the White House in early December, with President Donald Trump rowing back on previous plans to cut military spending.

Trump appeared to call the Defense Department budget of $716 billion "crazy" in a December 3 tweet, before later agreeing to a request from Defense Secretary James Mattis to propose a defense budget of $750 billion for the coming year, an administration official confirmed to CNN.

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