Arms exports "for our own"? What lies behind president’s statements and what industry really expects
Drone Industry
Arms exports have stayed in the headlines of Ukrainian and international media at least since late 2024, when the state, the primary customer for the defence industry, hit the limits of its financial capacity.
Exports of Ukrainian weapons halted in 2022, after Russia launched its full-scale invasion of Ukraine. Defense industry enterprises focused on meeting the needs of the front. According to the Stockholm International Peace Research Institute (SIPRI), Ukraine had ranked 12th globally by arms-export volumes, holding 0.9% of the global market.
But, interestingly, arms exports have not been legally banned in Ukraine. The system simply does not function, despite the procedures that exist on paper. Companies complete all required checks but receive a negative response or no response at all.
Leading manufacturers and associations have repeatedly warned the public, officials, and even international partners that unless export opportunities are unblocked, a sector that has surged in recent years, contributing a third of domestic GDP growth, risks, at best, stagnation and, at worst, complete collapse, which would inevitably undermine the country’s defense capability.
Among the reasons for blocking arms exports, market players single out two main concerns circulating in government offices:
- The reaction of international partners: how can Ukraine export weapons if it continually asks allies to supply it with defense products?
- Ukrainian products, primarily drones, could end up in Russia via third countries and pose a threat to Ukrainians.
Specialists have repeatedly stressed that these are little more than myths. First, only surplus defense products would be sold abroad. Second, no one plans to trade arms with Iran; the focus is primarily on NATO countries and U.S. allies outside the alliance. In addition, contracts in such cases include clauses prohibiting re-export.
"Saudi Arabia or the UAE will not stoop to reselling Ukrainian weapons to Russia," one industry source told Censor.NET on condition of anonymity due to the sensitivity of the topic.
He also noted that Ukraine and Russia share the same component base — China:
"At present, we do not produce high-tech products that Russia also does not make. I don’t think it would be any revelation to the Russians if they took apart one of our electronic products and found 70% Chinese components. Were they unaware of that? They were not. The same applies to Russian models."
Capacity is growing faster than orders
Overall, the ice began to break on exports in May 2025. The media reported that the President’s Office had finally reached a compromise on the issue and even announced possible scenarios for how these exports would take place.
In August, the Verkhovna Rada passed on second reading the key bills to implement the Defence City initiative, a special legal regime for defense-industry enterprises that also indirectly concerns arms exports.
Read more: Defence City: Boost for defence industry or closed club for chosen few?
However, little has changed for manufacturers. International markets remain closed to them. The state is looking for ways to increase procurement, but it cannot contract 100% of domestic defense-industry capacity.
"Ukrainian defense-industry enterprises can produce far more than the state and partners are currently purchasing. In 2024, the sector’s total capacity was about $20 billion, of which only $10 billion was actually realized — half the potential. In 2025, projected capacity exceeds $35 billion, but actual purchases amount to just $12–12.5 billion. In other words, capacity is growing faster than orders. If we don’t open up sales of surplus weapons, some production lines will simply shut down. Without long-term contracts and external markets, we risk losing momentum, engineering teams, and technological upgrades," The Ukrainian Council of Defence Industry (UCDI) said.
Plants are already beginning to idle. Сhiefly those producing armored vehicles, as frontline demand for them has been covered and there are no new orders, and thus no funding. If a plant shuts down, restarting that production will be extremely difficult, primarily because of the loss of personnel who will end up in the army, move to other, non-defense industries, or leave the country altogether.
Read more: Lack of specialists affecting country’s defence capability. What to do?
All this comes as Russia methodically attacks industrial facilities. As Defense Express reports, Ukraine risks being left without long-range missiles and UAVs. For example, the Pavlohrad Chemical Plant, the only facility capable of producing rocket propellant, is now in the danger zone, 80 km from the front line. Talk of relocating it is unlikely to be realistic, the outlet notes, because the plant covers roughly 700 hectares due to legacy production technologies.
Security risks have been the primary reason for moving capacity abroad for 89% of Ukrainian defense manufacturers. Moreover, companies continue to consider relocating production outside the country, according to an anonymous survey of 35 private-sector defense firms conducted by Tech Force in UA. Some 61% cited the inability to export their products, and 56% pointed to low volumes of state orders and restrictions on the export of technologies.
And although the share of companies planning relocation or already having done so fell for the first time in the past eighteen months, from 85% in February 2025 to 51% as of October, the trend could change quickly. The decline was likely influenced by recent statements about launching controlled exports of arms and military equipment.
"The industry has responded positively to the government's green light for the export of military equipment. This is confirmed by another survey indicator: 56% of manufacturers see proactive steps by the government to improve the business climate in the defence industry, compared to 38% at the beginning of the year. This dynamic may continue over the next six months if the industry sees that the state has developed a level playing field for companies, clearly defined red lines, and adheres to European principles on international arms trade," explains Kateryna Mykhalko, executive director of the Tech Force in UA.
Unmanned surface vehicles and artillery — the first to be exported?
At the Third International Defense Industries Forum DFNC3 held in Kyiv in October, President Volodymyr Zelenskyy tasked officials and manufacturers with ensuring that at least 50% of the weapons at the front are domestically produced by year-end. Today, more than 40% of the weaponry used at the front is produced in Ukraine or co-produced with Ukrainian companies.
Zelenskyy also stressed that the capacity of Ukraine’s defense industry has grown many times over since 2022. In UAVs and missiles alone, next year’s planned output is at least $35 billion.
Speaking at the forum, the president set out the need to develop a mechanism for opening controlled exports of Ukrainian weapons. At a meeting with government officials on 28 October, he specified that the program should be launched in November. According to Zelenskyy, Ukraine is ready to export unmanned surface vehicles and certain types of artillery systems. This likely refers to the Bohdana self-propelled howitzer, whose output has reached 40 units per month.
"Ukraine is moving to the next stage. We have begun establishing joint defense production with our key partners, both in Ukraine and in partner countries. In effect, we are integrating Ukraine into the Western world. It is time to launch exports of Ukrainian weapons, those types we have in surplus and can therefore export to finance the types that are particularly needed here in Ukraine for defense," explained Volodymyr Zelenskyy.
He said agreements are in place to open export-import platforms in Europe, the United States, and the Middle East. The first representative offices will open this year in Berlin and Copenhagen, with Washington to follow. Work on the so-called Drone Deal is actively underway.
"Sea drones could be among the first to be exported, because there isn’t much left for them to do in the Black Sea — not much of the Russian fleet is still afloat. Our drones have already proven their effectiveness. The United Kingdom, as a maritime nation, may be interested in them," said Oleksandr Kamyshin, the Ukrainian president’s adviser on strategic issues.
According to Zelenskyy, Kamyshin will oversee export contracts on the European continent. Oleksandr Kamyshin is a former Minister for Strategic Industries of Ukraine and currently chairs the Ukrainian Council of Defence Industry.
In an interview with Liga.net, Kateryna Mykhalko, executive director of Tech Force in UA, emphasized that setting up arms exports could take years. To enter foreign markets, Ukrainian manufacturers must first obtain export authorization from the State Service of Export Control and secure approval from the Interagency Commission on Military-Technical Cooperation and Export Control, which, according to informed Censor.NET sources, still needs to be staffed.
After that, companies must meet the importer state’s requirements — Germany, the United States, Belgium and other jurisdictions have their own rules. In many cases, the equipment undergoes testing at the buyer country’s proving ground, and only upon completion of these procedures is a contract signed.
Mykhalko estimates that establishing the export process takes from six months to several years — longer in the EU and U.S. markets due to complex regulatory procedures. For certain African countries, the path may be simpler and faster.
Moreover, the Secretary of Ukraine’s National Security and Defense Council, Rustem Umerov, expects the first arms-export contracts from Ukraine no earlier than the second half of 2026.
"Even under an optimistic scenario in which the state facilitates arms exports, we as Ukraine’s defense industry are already late.The point is that European countries’ requirements for weapons are very strict, and Ukrainian "combat-proven" alone will not suffice. It will take many months, if not years, to get through testing regimes and the process of adoption into service," said DEVIRO, a company that has been developing, designing and manufacturing unmanned aerial vehicles and related software since 2014.
The company believes Ukraine should have begun aligning its weapons with Europe much earlier: providing a roadmap for integrating arms manufacturers into state programs with European investment, bringing defense sectors closer together, and maintaining a steady dialogue with partners through defense associations.
"Lately we have heard positive statements from state officials, but in practice we still do not see concrete action. We are losing time, while the enemy hunts our production sites and depots every day. Arms exports are not so much about money as about strengthening Ukraine on the international stage, enabling technological development, and surviving the most difficult period of our statehood," DEVIRO emphasized.
Three scenarios for the drone industry’s development
The industry has generally welcomed the news of launching exports in some form. Still, a healthy dose of skepticism remains.
Tech Force in UA recently outlined three scenarios for the drone industry in 2026: Status Quo, negative, and positive.
"For the private defense sector to grow, systemic steps and open communication from and with the state are needed. We are having this discussion even as security risks are rising for other countries too due to hostile drones entering their airspace. It is crucial today to develop transparent, comprehensible rules of the game, adhere to European principles on arms exports, and avoid crossing red lines," said Tech Force in UA executive director Kateryna Mykhalko.
The Status Quo scenario modeled by the association identifies a series of challenges facing Ukrainian manufacturers: limited budget resources and the absence of a coherent state policy to support domestic producers. This constrains their growth potential and threatens the loss of competitive positions in both domestic and international markets. In other words, this scenario will materialize if everything is left as it is and nothing is done.
Industry sources told Censor.NET that Ukrainian UAV manufacturers such as Ukrspecsystems and DEVIRO were the world’s largest by sales last year. But this year, they have ceded ground. According to sources familiar with the situation, in the absence of exports and amid state overregulation, these giants risk turning into small regional producers within two years. Their niche on the global market would be taken over by Polish, French, German, and other companies.
The negative scenario, as projected by the Tech Force in UA, would erode the state’s defense capability, economic resilience, and the development of the defense industry: with shrinking state orders and no ability to export, manufacturers will keep seeking relocation options, while state contracting authorities become ever more dependent on imports and assistance from partner countries.
The positive scenario would mark a new stage in the development of Ukraine’s defense sector — driven by market conditions, long-term contracts, stable state regulation, opportunities to export products and technologies, and the growth of partnerships with allies.
"What motivates companies not to sever their legal ties with Ukraine is the ability to export their own products (74%) and technologies (69%), along with predictable state orders for several years (69%). Manufacturers also cite the ability to establish joint ventures (JVs) with partner countries — 37%. This would significantly move the industry toward the positive scenario," said Kateryna Mykhalko.
What is controlled export and what are the risks
Any export is, by definition, controlled. There is a dedicated regulator, the State Service of Export Control (SSEC), which is supposed to set clear, transparent rules, review the required documents, and issue licenses.
In the case of arms exports, there is also the Interagency Commission on the Policy of Military-Technical Cooperation and Export Control (MTCEC). It is to include representatives of various ministries, the Verkhovna Rada, law enforcement bodies, and the President’s Office. The MTCEC`s task is to assess potential national-security risks from proposed arms sales. Based on its conclusions, the SSEC may deny an export license.
The industry’s greatest fear, however, is a return to a negative past practice — the creation of a single special exporter. In essence, this is an intermediary for all foreign-trade contracts that resells products.
"Ukraine’s anti-corruption bodies and courts are rife with cases against special exporters who failed to deliver on promised contracts, misappropriated state funds, blocked sales by private manufacturers, and — worst of all — undermined the defense industry’s reputation as a reliable partner. Such cases emerged, in particular, because special exporters had exclusive powers, which created opportunities for abuse," Mykhalko wrote in a column for NV.
According to her, Ukrainian defense companies are already integrated into Western industrial and investment networks. They work directly with European and U.S. partners, investors, and clients, and do not need intermediaries to conduct lawful and secure exports.
"For many years, Ukraine used a model in which only a narrow circle of state-owned special exporters had the right to conduct foreign-trade transactions involving military goods. Formally, this was meant to control sensitive technologies, but in practice it bred opacity, political influence, and corruption risks," added Serhii Honcharov, executive director of NAUDI.
Another systemic problem, in his view, is the lack of coordination in permitting procedures. Each contract goes through dozens of stages — approvals, interagency decisions, and end-user checks. This causes delays, loss of customers, and reputational risks for Ukrainian companies.
"We need to move away from manual management and switch to a digital, predictable regulatory model. We propose an open register of export operations, public reporting by special exporters, and standardized approval procedures. This will reduce corruption risks and increase the trust of international partners," Honcharov stressed.
The National Security and Defense Council emphasizes that the procedure remains simple and transparent: if a company meets the defined eligibility criteria and has surplus production capacity not required by the security and defense forces, it may apply for an export license to the State Service of Export Control. Within 90 days, the SSEC verifies all data and grants authorization.
At the same time, Oleksandr Kamyshin, the president’s adviser on strategic issues, notes that private manufacturers are not required to go through state special exporters. A manufacturer may use a state special exporter, a private special exporter, or obtain its own authorization — either as a resident of Defence City (within 7–12 days) or by a separate Cabinet of Ministers decision for a specific producer (up to one year).
An export license is issued after clearance by the State Service of Export Control and the Interagency Commission under the NSDC. NSDC Secretary Rustem Umerov assured that this provides a dual layer of control — technical and security.
In this way, the state retains full control over the end user of the weapons. The NSDC draws up and updates an exhaustive list of countries to which Ukrainian weapons may be exported. The first to be included will be countries with which Ukraine has signed security agreements.
Umerov underscored that no item may be resold without Ukraine’s knowledge — post-export control applies, including with the involvement of intelligence.
"The priority is the front. If the Armed Forces urgently need this weapon, an export license may be suspended or revoked. Security and the military’s needs will always outweigh any export contract," he concluded.
As Censor.NET's interlocutors from the industry emphasise, if we want an effective defense industry, exports are indispensable. Countries, whether the United States, Israel, or even Russia, understand perfectly well that arms exports are an element of geopolitics and international ties. Ukraine now needs to claim its place in international cooperation, focusing on areas where it already has achievements, for example, the drone segment.
