Type of Arms Trade

Licensing

The term 'Licensing' refers to the case where the production takes place on the basis of licensing agreement between 2 companies if 2 different countries whereas the term “Unlicensed” production boot out the original holder of technology as well as the cases where the right of production is inherited by another legal entity(in case of successor states of USSR).

Arms Aid: Factsheet

Arms Aid is one of the most common and most prevalent methods of arms transfer. Aid often comes in form of money for the foreign military to buy weapon & equipment from the donor country. This aid is given to the countries in an alliance( Mutual Defence Assistance Programme-NATO), recipient countries which have a strategic partnership with donor countries or on a humanitarian basis.

Arms Trade

Source: Wikipedia

The two ways of international arms transfer are:
➠Arms Trade
➠Arms Aid 
Because of the secret nature of many arms transaction, the difficulty arises in describing the boundaries of each of the above 2 categories.