In a 12 months of battle, with fight challenges at residence and political challenges overseas, together with the banning of corporations from main worldwide exhibitions, Israel’s protection trade achieved a brand new report in protection exports in 2014: $14.795 billion, up about 11.7% from 2023 and double the quantity 5 years in the past, the Ministry of Protection experiences.
The primary engine of demand was Europe, the place protection budgets have elevated as a result of Russia-Ukraine battle, and the proportion of Israel’s protection exports has jumped from 35% to 54%. An intriguing enhance through the battle has been within the Abraham Accords international locations, which, after falling from 24% to solely 3% in 2023, jumped once more to 12% in 2024. In distinction, a pointy, substantial decline was recorded in Asia-Pacific, the biggest vacation spot till final 12 months, from 48% to 23%.
“There may be problem in Asia-Pacific, however even there we’re making an effort to adapt ourselves to the markets,” says Ministry of Protection Worldwide Protection Cooperation Directorate (SIBAT) head Brig. Gen. (res.) Yair Kulas. The ministry explains the problem in Asia, just like different markets, together with the US and Europe, by the demand for native manufacturing. At the moment, the coverage of India (Israel’s largest protection export vacation spot) and different international locations is that as a part of offers, they are going to obtain knowhow, and a few manufacturing shall be carried on the market. “We understood that we wanted to permit our industries to be related, as a result of even in NATO tenders an area subsidiary is required.”
One other report was achieved within the quantities of offers, with for the primary time ever, greater than half of the offers price $100 million or extra. Based on SIBAT, there was a leap final 12 months from 40% to 56.8% in transactions on this vary. On the similar time, 17.4% of the overall offers got here from small transactions of as much as $10 million, 16.3% within the vary of $10-50 million, and the remainder have been within the vary of $50-100 million. “We advocate a coverage of preventing for each deal,” Kulas stresses. “Even when it’s a small system and a restricted market, we work to be there.”
The primary driver of offers is G2G (authorities to authorities). Israel’s main purchasers like Greece, desire G2G as a result of authorities umbrella of the deal and the flexibility to work in a single transaction with a number of Israeli industries. Thus, whole G2G transactions of the Ministry of Protection with its counterparts world wide reached a report of $6.7 billion. Which means 45% of Israeli protection exports final 12 months have been led by the Ministry of Protection.
Air protection leads demand
The battle has created a significant problem for Israel’s protection industries. Firms should provide Israel’s protection wants, generally on the expense of delaying deliveries to clients overseas, or if attainable doubling and generally much more the variety of manufacturing strains. On the similar time, the battle elevated demand for merchandise much more as a result of they’re “fight examined” – confirmed on the battlefield.
RELATED ARTICLES
“The mix of industries, IDF and Ministry of Protection is engaging on the earth,” says Kulas. “When engineers in industries serve within the reserves after which return to improvement, that is distinctive to Israel. This brings about a rise in world demand.”
World demand is led by air protection techniques, particularly as a result of Russia-Ukraine battle, which has seen widespread use of missiles, and above all drones. Israel’s success in coping with the unprecedented Iranian assaults in April and October final 12 months has positioned its protection trade as a spotlight for rising worldwide demand within the discipline, and that is additionally mirrored in SIBAT knowledge. About 48% of Israeli protection exports in 2024 have been air protection techniques. That’s, nearly equal to all different Israeli offers mixed. In 2023, for comparability, air protection techniques accounted for “solely” 36% of the amount of offers. The expansion in each the proportion of enormous offers ($100 million or extra) and the proportion of air protection techniques out of the overall is obvious in Israel’s main offers within the discipline, most notably the sale of the Arrow 3 by Israel Aerospace Industries (IAI) to Germany in 2023 for $3.5 billion, and the sale of David’s Sling to Finland for about $360 million.
The 2024 figures don’t mirror the worldwide curiosity within the laser-based air protection system Iron Beam. Growth is being led by the Ministry of Protection Directorate of Protection, Analysis and Growth (DDR&D) (MAFAT) and Rafael. Iron Beam Kulas says, “Arouses curiosity, and has potential. Nonetheless, with each system we produce, or in improvement, we perceive that we should shield the techniques. Subsequently, we rigorously select our clients.”
Areas wherein IAI stands out are satellites and area, in addition to radar and digital warfare, which every accounted for 8% of the exports. In July 2024, IAI reportedly offered satellites to Morocco, a rustic within the Abraham Accords, for about $1 billion. A worrying pattern may be seen in drones and unmanned aerial automobiles (UAVs). In 2022, these accounted for about 25% of whole offers, whereas in 2023 they fell to solely 4% – and this 12 months they’ve up to now accounted for only one%.
Final November, Elbit introduced that it had gained contracts price $335 million to provide Hermes 900 UAVs and protection techniques to a European nation. The contracts, which shall be carried out over three and a half years, additionally embody the provision of PULS rocket launchers. Weapons, launchers ammunition and armaments accounted for about 2% of exports and about 3% of whole income final 12 months.
The challenges following the battle
The primary half of 2025 is about to finish, and regardless of the encouraging knowledge, SIBAT’s head admits they’re going through an awesome problem. “The pictures from Gaza and the accusations in The Hague are having an influence. This intensifies the Ministry’s problem, and we have now to see how we will cope.”
One other problem lies in provide chains – a problem that started through the Covid pandemic and has worsened through the battle as a result of results of Houthi assaults on transport lanes and their missile launches, which result in the intermittent shutdown of Ben Gurion airport.
Kulas says that the battle has highlighted some great benefits of Israel’s protection corporations, which had not been beforehand evident on the worldwide market: “Over time, international locations have sought high quality and value, and in recent times one other key issue has entered the place Israeli industries have a bonus – and that’s pace of supply. If a rival comes and offers a supply time of seven years, our corporations include 2-3 years and so they take it. They succeed on this regardless of the challenges of the battle.”
Revealed by Globes, Israel enterprise information – en.globes.co.il – on June 4, 2025.
© Copyright of Globes Writer Itonut (1983) Ltd., 2025.
