97% of private arms manufacturers are waiting for the opening of exports – data from the TSU and BRDO report

Ninety-seven per cent of private arms and military equipment manufacturers in Ukraine are awaiting the lifting of export restrictions in order to begin supplying partner countries, launch joint production and scale B2B and B2G partnerships. This information comes from the analytical report by the Technological Forces of Ukraine and the Office of Effective Regulation (BRDO), entitled “War as a Driver: How Ukrainian Defence Technologies and Private Industry Are Growing.”

The main centres of production remain Kyiv and the western regions, with new production sites being launched on average within three months. Chinese components are gradually being replaced by European, American and Ukrainian parts, and more than 28 per cent of manufacturers use at least half of their components produced domestically.

The greatest needs of companies are focused on attracting investment for research and development, scaling up production, entering new markets and creating new products.

Most Ukrainian manufacturers of weapons and military equipment consider NATO member states as priority export markets and also see prospects in the Middle East and North Africa. According to the survey, median capacity utilisation stands at 55 per cent, and 79 per cent of respondents consider short-term government contracts to be the main factor restraining the development of the industry.

The market is becoming increasingly competitive due to growing demand from military units, volunteers and local authorities, which improves the quality of equipment, accelerates innovation and reduces prices. Today, 88 per cent of companies participate in direct procurement by military units, while only 64 per cent of manufacturers are involved in government procurement.

“Asymmetric weapons manufacturers demonstrate what the traditional defence industry is often unable to achieve: the ability to quickly find solutions and bring them into series production. If these technologies become part of the European defence ecosystem, we will gain a common security shield for Ukraine and its allies in the EU,” says BRDO Executive Director Oleksiy Dorohan.

The report’s conclusions are based on surveys and in-depth interviews with members of the TSU.

It should be noted that representatives of the Ministry of Strategic Industry announced the partial opening of arms exports as early as May 2025, but the newly appointed Minister of Defence, Denys Shmyhal, opposed the export of military products. Instead, Ukraine has launched joint production programmes with European partners.

The Technological Forces of Ukraine is a public association comprising private enterprises developing and manufacturing military technologies. The association is governed by a board of directors and cooperates with the Ministry of Defence, the Brave1 state cluster, the Forces of Unmanned Systems, and other participants in the defence sector.

BRDO is an independent think tank funded by international donors, primarily the European Union.