Seller is King in Defence

John Wanamaker, a pioneer in marketing, revolutionised business practices by making marketing management a core focus. He championed the "Customer is King" philosophy, emphasising customer-centric strategies that reshaped modern commerce.

- AJAY KUMAR

The concept underscores the power and centrality of the customer in driving business success and highlights how customers are the most powerful influence on market movements. However, this principle has little application in the defence market, where the seller holds the dominant position, dictating the terms of engagement—making it more apt to say, "The seller is king."

In the defence market, sellers often maintain the upper hand despite the exceptionally high costs of their products. Unlike other sectors, where producers of expensive items invest heavily in marketing to attract buyers, defence manufacturers and nations not only control the availability of their technologies, but have also established extensive institutional frameworks to decide who gets to buy what. For example, the United States employs systems like the International Traffic in Arms Regulations (ITAR) and the Export Administration Regulations (EAR) to regulate the trade of defence and dual-use technologies. Under the EAR framework, export classifications include: No Licence Required for unrestricted items and destinations; Licence Exception—permitting certain controlled items to be exported without a licence to specified destinations; General Licence—allowing approved exports without repeated permissions; and Validated Licence—requiring specific approval for each export. Additionally, ITAR governs the export and import of defence and space-related articles, services, and technical data, further reinforcing the seller's dominance in the market. As a result, buyer nations are often compelled to negotiate for favourable terms to gain access to advanced technologies.

This dynamic highlights the imbalance in the defence market, where sellers wield disproportionate power over buyers—even when buyers, like India, rank among the world's largest defence importers.