Despite a government policy to make Australia a major weapons exporter, it has instead become the world’s second largest arms importer.

The Stockholm International Peace Research Institute (SIPRI) says Australia has fallen from the world’s 18th largest military exporter down to 25th.

At the same time, it jumped from fourth-highest in weapons imports in 2017, to become the world's second biggest military purchaser in 2018.

This was largely because payments for expensive new aircraft such as Joint Strike Fighters as well as French work on the Future Submarine project went through in 2018, pushing Australia close to the top.

Last year, the Turnbull government announced plans to make Australia one of the world's top 10 exporters, setting up a new loan scheme for defence companies to sell their products overseas.

“We expect that in the next nine years because of the investments of this government we'll move to being in the top 10 defence exporters in the world, and so we should be,” former defence industry minister Christopher Pyne predicted when launching the strategy.

Defence analysts Andrew Davies says Australia will struggle to overtake other nations for exports.

“Getting up that league table is actually really hard, and I don't think there's any realistic prospect of climbing into the top 10,” he said.

“Not moving up the table doesn't mean that the defence sector isn't expanding, because everybody's trying to sell more, so it's entirely consistent that Australia could be exporting more and not moving up the table.”

Defence Industry Minister Melissa Price has questioned SIPRI's figures.

“The Stockholm International Peace and Research Institute [SIPRI] system for measuring defence exports does not capture a large amount of Australian industry defence exports, particularly our niche capabilities in sustainment and upgrade services,” Minister Price said in a statement.

“Becoming a top-10 global defence exporter is an ambitious target.

“A strong, exporting industrial base generates economic growth and creates jobs, which is why we're striving to be in the world's best.”