Emerging trends in aerospace and defense 2025

The global Aerospace and Defense (A&D) sector is growing rapidly. Airbus and Boeing predict more than 40,000 new commercial jets will be manufactured over the next 20 years.¹ And global defense spending rose by nearly 10 percent in 2024, its fastest growth rate in nearly four decades.²

At the same time, however, the sector is undergoing rapid and disruptive change across a wide range of areas. The agenda is continuously shifting based on rapidly evolving geopolitical change and technological advancements. As such, A&D leaders and defense departments will need to take a much more holistic view of their strategies to thrive in the current environment.

Gaurav Mehndiratta

Partner and National Head, Corporate and International Tax

KPMG in India

mail

"In an era marked by geopolitical flux, rapid technological transformation, and an urgent need for resilient supply chains, the Aerospace and Defense sector stands at a pivotal inflection point. As global defense spending reaches a four-decade high and nations pursue industrial sovereignty with renewed urgency, for India, to become self-reliant in defence manufacturing and gain leadership in sustainable innovation, a future-ready policy framework is essential. At KPMG in India, we believe that aligning the forthcoming defence acquisition policy with national security goals, encouraging R&D investments and providing a level playing field to the private and foreign players will be pivotal to accelerating India’s role in the global A&D value chain.

This report serves as a strategic compass for industry leaders worldwide offering a forward-looking analysis that distills the insights of global pioneers alongside KPMG’s deep sectoral expertise into ten transformative trends that are expected to shape the future of A&D industry."

This report is intended to help sector executives, defense leaders, suppliers and investors make the most of the rapid change now underway across the sector. Rather than simply focus on the challenges, this report strives to provide A&D executives and decision-makers with practical and actionable insights and clear takeaways to better understand the challenges and identify the opportunities.

Emerging trends in aerospace and defense 2025

Explore actionable insights and clear takeaways to better understand the challenges and identify the opportunities in the A&D sector

Download

Ten emerging trends for 2025

Geopolitics: Risks and opportunities in the new world order
Supply chain resilience: Agility in the face of disruption
Sustainability: Collaboration in a fractured world
Competition: Scaling the next generation
R&D: Accelerating innovation

Digitalisation: Delivering on the need for speed
M&A: Focus on value creation
Workforce: Reshaping the strategy
Defense: Integrating domains
Space: Commercialising the next frontier

¹ Airbus, Boeing Raise 20-Year Forecasts For Aircraft Deliveries, Ainonline, 2023

² Trends in world military expenditure, 2024, Stockholm International Peace Research Institute, April 2025

How can KPMG in India help

We have a well-defined and robust approach to support our clients effectively across a spectrum of projects in business performance services, transaction services and tax and regulatory services including offset advisory.