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Volume 2026
Main headlines from this issue
US permits naval construction abroad if production is eventually localised
A Presidential Memorandum signed by US President Donald Trump on 13 August, directs the US Department of War to develop a new procurement approach to allow foreign shipbuilders to participate in the future procurement of three classes of US naval vessels, provided they invest in US shipbuilding capacity, transfer technology, train US workers, and establish domestic supply chains.
Turkey shifts KAAN engine strategy from licensed production to IP
Turkey has revised its industrial strategy for the General Electric Aerospace (GE Aerospace) F110 engines intended for use on its KAAN combat aircraft. The country is moving away from demanding licensed production in favour of industrial participation and access to new technologies.
Boeing signs Apache sustainment agreements to fulfil Polish offsets
Boeing has signed agreements with Poland’s WZL-1 and the Central Military Bureau of Design and Technology to implement its offset commitments as part of Poland’s AH-64E Apache helicopter procurement. The agreements establish long-term industrial cooperation for the sustainment, maintenance and ground support of the country’s Apache fleet.
Rolls-Royce enhances AMCA engines localisation offer to India
UK prime Rolls-Royce and India's Reliance Industries have announced their intent to jointly design, develop, manufacture and deliver a sovereign indigenous combat engine for India's Advanced Medium Combat Aircraft (AMCA) programme. The two parties would combine Rolls-Royce’s expertise in advanced propulsion with Reliance’s technology, manufacturing, scale, and execution capabilities.
Elbit Systems to set up drone JV in Serbia
Israel’s Elbit Systems and Serbia’s state-owned Jugoimport SDPR are set to establish a joint combat drone factory in Serbia. Serbian President Aleksandar Vučić announced on 8 August that the facility could be inaugurated between 15 and 20 September.
Airbus and Thales expand defence cooperation with Danish firms
Airbus Helicopters has signed an MoU with local defence-tech company Terma to establish a framework to cooperate on upcoming helicopter campaigns, while advancing operational sovereignty and high-tech manufacturing in Denmark. Meanwhile, Thales announced a strategic partnership with Denmark’s Systematic to develop integrated air defence capabilities.
Main headlines from this issue
Annual defence white paper prioritises Japanese industrial base, expands foreign cooperation
In Defense of Japan 2026, its annual white paper published on 4 August, the Japanese MoD has set out measures to strengthen the country’s domestic defence industrial base, expand international co-production and technology cooperation, and improve defence procurement.
Peru’s tank programme stalled over funding constraints
The Peruvian Army’s Technical Operational Study Committee has reportedly identified the South Korean prime Hyundai Rotem’s K2 Black Panther as the preferred option for its main battle tank requirement. However, a formal contract has yet to be awarded, as domestic funding constraints have stalled the planned procurement.
Embraer signs Colombian KC-390 contract with offsets
Colombia has ordered two KC-390 Millennium multi-mission aircraft from Brazil’s Embraer. While the order was placed on 30 March, Embraer signed the contract with the Colombian Air Force on 4 August. Valued at USD366.4m, the contract reportedly includes a comprehensive offset programme designed to meet Colombian requirements.
Lockheed to build combat systems integration capacity in Australia
Lockheed Martin has secured a two-year AUD29.3m (USD20.7m) contract from the Australian Submarine Agency (ASA) to establish a sovereign combat systems integration capability to support Australia’s future Virginia-class submarine procurement under AUKUS, the trilateral Australia-UK-US security partnership.
Estonian firm to develop missile technologies with UK partners
Estonian missile manufacturer Frankenburg Technologies has signed agreements with British firms BAE Systems and Roxel UK to develop key technologies for its Mark I missile platform. The agreements cover missile technology, including warheads and rocket propulsion, and they are aimed at boosting the UK’s missile production base.
Romania to procure Thales radars under SAFE
France’s Thales will supply Romania with 12 Ground Master 200 Multi Mission All-in-one radars, worth approximately EUR247m (USD284m), under a government-to-government contract signed on 17 July. The procurement is being funded under the European Union’s Security Action for Europe (SAFE) programme.
Main headlines from this issue
Government committee calls for offset regime revival in India
India’s Public Accounts Committee (PAC) has called for another substantial overhaul of the country’s defence offset regime, including expanding the policy’s coverage and calling for better implementation. This puts the PAC’s recommendations at odds with the MoD’s draft Defence Acquisition Procedure (DAP) of 2026, which removes the dedicated offset framework altogether.
Bulgaria keen to set up JV with Rheinmetall despite problems
Bulgaria has decided to continue negotiations with Germany's Rheinmetall over a proposed domestic joint venture with state-owned arms manufacturer Vazovski Mashinostroitelni Zavodi (VMZ) Sopot, despite the Bulgarian government having identified “a number of problems” in the project.
UK awards Project Corvus to TEKEVER after failed tendering process
The UK’s MoD selected Portuguese prime TEKEVER’s AR5 platform on 25 July under Project Corvus to replace the British Army’s legacy Watchkeeper drone systems. On 22 July, just days ahead of the selection, TEKEVER had established an industrial partnership with British advanced composites manufacturer iCOMAT to support local production of the drones.
Portugal to procure Italian frigates with tech transfer
Portugal has signed a government-to-government agreement with Italy to acquire three FREMM EVO multi-purpose frigates from Italy’s Fincantieri through a transfer of technology. According to official Portuguese documents, the agreement, signed on 20 July and valued at EUR3–3.9bn, is being financed through the EU’s Security Action for Europe (SAFE) instrument.
Saab, Embraer to expand Gripen production in Brazil
Sweden’s Saab and Brazil's Embraer have signed a Heads of Agreement to establish a framework to expand local manufacturing capacity established under their existing industrial cooperation programme and to potentially produce 20 additional Saab Gripen fighter aircraft in Brazil.
Chinese firm to localise communications equipment in Egypt through tech transfer
China’s CETC International signed a contract with Egypt’s Arab Organization for Industrialization (AOI) on 19 July to locally manufacture communications equipment, transfer associated technology to Egypt, and expand domestic production in the electronics sector.
Main headlines from this issue
UK releases anticipated Defence Investment Plan
The UK government has published its Defence Investment Plan, setting out how it intends to invest GBP298bn in defence over the next four years while using defence procurement reform to strengthen the country’s industrial base and expand domestic production capacity. The Plan is expected to impact industrial participation in the UK.
Australia releases updated Defence Industry Strategy
Australia has released its second Defence Industry Development Strategy, which includes an enhanced Sovereign Defence Industrial Priorities framework, shifting the country's defence industrial policy from strategy development to implementation.
Canada selects TKMS for its submarine project contract
Canada has selected Team 212CD, led by Germany's TKMS, as the preferred supplier for the long-awaited Canadian Patrol Submarine Project (CPSP). Consequently, South Korea’s Hanwha Aerospace reportedly shelved plans for a Canadian armoured vehicle manufacturing joint venture after sister company Hanwha Ocean’s CPSP bid was unsuccessful.
Lockheed Martin to set up missile JV with Rheinmetall
US prime Lockheed Martin and Germany’s Rheinmetall have signed an MoU to establish in Europe the first overseas production hub for the Army Tactical Missile System (ATACMS). Signed on 7 July during the NATO Summit Defence Industry Forum in Ankara, the agreement sets out plans to establish a joint venture to manufacture the missiles in Germany.
Fincantieri expands cooperation for Croatian corvette programme bid
Italy’s Fincantieri has signed MoUs with Croatian shipbuilders Brodotrogir Cruise and Iskra Shipyard to strengthen its domestic industrial partnerships for Croatia’s Multi Role Corvette programme. The estimated EUR660m–1.6bn programme is expected to involve offsets and local industrial participation.
Poland to become first producer of Barracuda missiles in Europe
US defence company Anduril Industries has partnered with Poland’s Polska Grupa Zbrojeniowa (PGZ) and its subsidiary Military Aviation Works No 2 (WZL 2) to establish production of Barracuda-500M cruise missiles in Poland, making it the first country in Europe to manufacture them.
Main headlines from this issue
Switzerland anchors offsets in law for the first time
The revised Swiss Military Act, which came into force on 1 June 2026, establishes for the first time in Switzerland a legal basis for offset obligations in their defence procurement. The Swiss Federal Council will release a dedicated ordinance in 2027 to also define the detailed implementation of offsets.
Japan reviews defence industrial policy, considers FMS-like framework
Japan is considering introducing a government-backed defence export framework modelled on the US’s Foreign Military Sales (FMS) programme. Under the proposed framework, the Japanese government would become the primary contracting authority for overseas sales of Japanese defence equipment.
KNDS wins long overdue Malaysian howitzer contract
Malaysia has contracted KNDS and its Malaysian partner Advanced Defence Systems (ADS) to supply 18 Caesar 155mm self-propelled howitzer systems for its Armed Forces. The deal, announced on 16 June, includes know-how transfer, a production licence, and long-term industrial capability development in Malaysia.
India’s MKU to develop and localise electro-optics systems in Indonesia
India’s MKU Limited has signed an agreement with Indonesia’s PT Republikorp to jointly develop and localise electro-optic systems in Indonesia. The partnership is centred around technology transfer, joint manufacturing, local certification, and the integration of MKU’s optronics portfolio into Indonesia’s defence ecosystem.
Latvia’s Origin Robotics wins French drone contract
France has awarded Latvian company Origin Robotics a contract to supply its Blaze autonomous interceptor drone system to the French defence forces. Origin Robotics will partner with local company DSV to establish assembly and manufacturing capabilities for the system in France through a transfer of technology.
Lithuania to join CAVS programme; Patria signs first local partnership
In 2027, Lithuania will join the Common Armoured Vehicle System (CAVS) programme led by Finland’s Patria. Lithuania selected the Finnish prime’s 6×6 platform for its future armoured vehicle fleet on 27 May. Subsequently, in June, Patria launched its first industrial partnership in Lithuania to support local production.
Main headlines from this issue
Canada revises ITB Policy to enhance industrial cooperation
Canadian Prime Minister Mark Carney announced changes to Canada’s Industrial and Technological Benefits (ITB) Policy during CANSEC on 27 May. The updated policy, which governs industrial cooperation in Canada and is now in effect, is aimed at directing defence-related investments towards areas considered critical for Canada’s competitiveness and industrial resilience.
UK offset policy still underway
At the GICA conference held in Washington D.C. last month, Nick Ridgway, assistant head of strategy development, and Joe Royce, senior strategy and policy advisor, both of the UK’s MoD, made a presentation outlining the progress that was being made towards introducing a new offset policy for the United Kingdom.
Israel adopts new incentive-based cooperation model
At the GICA Conference, Daria Kravtsov, director of Israel’s Industrial Cooperation Authority for North America, announced a new incentive-based industrial cooperation model to align offset obligations more closely with national economic and technological priorities.
Aircraft development under European FCAS programme cancelled
France and Germany have discontinued the Next Generation Fighter development under the Future Combat Air System (FCAS) programme, following years of disagreements between industry partners Dassault Aviation and Airbus over programme governance, industrial workshare, and intellectual property.
Ukraine and Lithuania launch “Brave Lithuania” grant programme
Ukraine and Lithuania have launched Brave Lithuania, a bilateral defence innovation grant programme aimed at accelerating the development of new military technologies while embedding Ukrainian combat-driven innovation within Lithuania’s defence-industrial ecosystem.
Italy-India JV to explore aerospace and defence opportunities
On 4 June, Italy’s ALA Group announced the establishment of a local joint venture with India’s TVS Supply Chain Solutions (TVS SCS) to address opportunities in India’s aerospace and defence sectors.
Main headlines from this issue
GICA Spring 2026 Conference : US Arms Transfer Strategy and FMS
At GICA, Government officials elaborated on the approach that the US is taking on arms transfers, offsets, and industrial cooperation, noting that the country is undergoing its most significant transformation in the sector in decades. The US is focusing on working out in real time, the strategy launched by the 6 February Executive Order Establishing An America First Arms Transfer Strategy.
Estonia to release Industrial Cooperation guidelines 13 years after halting offsets
Estonia is moving towards a formal industrial cooperation policy that will embed domestic industrial participation into large-scale defence procurements. Although the framework has yet to be finalised, the MoD has already begun applying the principles of its upcoming policy on a case-by-case basis to gain practical experience.
Switzerland considers alternative air defence solutions with local production, amid Patriot delivery delays
Switzerland’s Federal Office for Defence Procurement (armasuisse) has received submissions from five manufacturers across four countries as part of an assessment related to the potential acquisition of an additional long-range air defence system. Switzerland is undertaking this exercise amid prolonged delays in delivering systems under the US-supplied Swiss Patriot programme.
Australia strengthens AUKUS partnerships
Australia has taken further steps to embed sovereign industrial capability into its AUKUS submarine programme. On 15 May, Australia selected Lockheed Martin as the preferred Combat System Integration Partner for its future fleet of Virginia-class submarines. In parallel, UK firms Babcock International and Truflo Marine have launched a pilot programme to qualify Australian industry members for submarine sustainment work, also under AUKUS.
Norway to produce and export Leopard tanks
KNDS, a consortium of Germany's KMW and France’s Nexter, together with Norway’s vehicle service and maintenance specialist RITEK, has opened a new Leopard 2 production facility in Levanger, Norway. Announced at the end of April, the facility is scheduled to begin production for the Norwegian Army in autumn 2026.
Naval Group wins Swedish frigate contract
Sweden has selected France’s Naval Group to supply four of its FDI frigates for the Royal Swedish Navy under Sweden’s Luleå-class surface combatant programme. Announced on 19 May following a multi-year evaluation process, the contract award initiated a phase of exclusive discussions between the Swedish authorities and Naval Group.
Main headlines from this issue
DKF Spring conference 2026
The DKF Spring 2026 conference was held in Gorinchem in the Netherlands on 21–22 April. The focus of the conference, hosted by Dutch prime Damen Shipyards and attended by 150 participants, was industrial cooperation not only in the Netherlands but also in Europe.
Brazil advances critical minerals policy with localisation incentives
Brazil’s Chamber of Deputies approved proposed Bill No. 2780/2024 on 6 May, establishing the National Policy for Critical and Strategic Minerals. The policy aims to attract investment and expand domestic supply chains in Brazil’s critical minerals sector through fiscal incentives and investment support measures, while also introducing some mandatory localisation requirements.
UAE orders Embraer C-390 jets, a first in the Middle East
The UAE’s Tawazun Council for Defense Enablement awarded Embraer a contract on 4 May for the supply of C-390 Millennium military transport aircraft, marking the platform’s first confirmed order in the Middle East, and the largest single-country international order for the aircraft to date.
Australian firm wins export contract under AUKUS
Australian defence company Century Engineering has secured a contract with US-based Huntington Ingalls Industries’ (HHI) Newport News Shipbuilding division to export precision-engineered cranks to the US Navy. The agreement marks the first time an Australian company has secured an export contract within the US naval nuclear supply chain.
Romania awards IFV contract to Rheinmetall
Romania has awarded Germany’s Rheinmetall the contract to supply 232 KF41 Lynx infantry fighting vehicles (IFV) under a EUR3.4bn (USD4bn) deal financed through the EU’s Security Action for Europe (SAFE) instrument. The acquisition, which is being carried out under the Mașina de Luptă a Infanteriei programme, launched in July 2025, places strong emphasis on domestic production, technology transfer, and industrial participation.
Fincantieri to set up naval JV in Albania
Italy’s Fincantieri and Albania’s state-owned defence company KAYO, under the control of the Albanian MoD, signed an agreement on 29 April to establish a joint venture for the construction and maintenance of naval vessels in Albania.
Main headlines from this issue
Japan revises defence export framework
Japan has revised its defence export framework, Three Principles on Transfer of Defence Equipment and Technology, to permit the transfer of lethal systems to partner countries and the export of non-lethal equipment without restriction. Previously, exports from Japan had been limited to five non-combat categories.
Thales expands defence industrial footprint in Malaysia
France’s Thales has announced defence initiatives with Malaysian industry partners to expand local assembly, technology transfer, and in-country sustainment capabilities for communications and surveillance systems for the Malaysian Armed Forces.
Final CPSP contenders expand Canadian cooperation
South Korea’s Hanwha Ocean and Germany’s TKMS are increasing efforts to secure the Canadian Patrol Submarine Project contract through deeper engagement with Canadian industry and expanded local partnership networks. As part of this push, TKMS announced a strategic collaboration with Canada’s QNX, while Hanwha held discussions with Irving Shipbuilding in Halifax to strengthen industrial partnerships.
Lockheed wins Australian long-range weapon system contract
The Australian government has selected Lockheed Martin’s High Mobility Artillery Rocket System (HIMARS) and the Precision Strike Missile (PrSM) as the winner of its Project LAND 8113 Phase 2. Their bid beat Thales’s and Kongsberg’s joint offer to sell the StrikeMaster.
Italian design wins Spanish combat vehicle contract
The Spanish MoD has awarded IDV, a subsidiary of Italy’s Leonardo, and Spain’s Indra Land Vehicles a contract to supply 34 IDV SuperAV 8x8 platforms for its new Marine Infantry Amphibious Combat Vehicle (VACIM) requirement. Under the EUR370m contract, signed on 17 April, IDV will supply the base vehicle platforms, while Indra will act as the prime integrator.
CSG to set up JV in Azerbaijan for vehicle repair and modernisation
The Czechoslovak Group (CSG) has signed a JV agreement in Azerbaijan focusing on lifecycle support activities, including repair, servicing, and modernisation of Azerbaijan’s existing fleet of armoured vehicles and selected land systems. The agreement, announced on 27 April, establishes a new joint venture in Azerbaijan called VEXA DS.
Main headlines from this issue
Australia updates National Defence Strategy, emphasises industrial cooperation
Australia released its 2026 National Defence Strategy (NDS) and the associated 2026 Integrated Investment Program (IIP) on 16 April. Both documents emphasise the importance of defence industrial collaboration with international allies and partners to Australia.
Hanwha announces EUR1bn investment package for Romania
Hanwha Aerospace has announced a EUR1.3bn (USD1.53bn) investment package to expand defence production capabilities in Romania. The investment is projected to generate EUR14.4bn (USD16.85bn) in total economic value, supporting over 9,400 direct and indirect jobs over the next decade.
GE Aerospace expands engine cooperation in India
US prime GE Aerospace and India’s Hindustan Aeronautics Limited (HAL) signed a technical agreement on 13 April to co-produce General Electric F414 jet engines in India. Under the agreement, GE Aerospace is expected to transfer manufacturing technology and IP to HAL.
Embraer expands cooperation in Colombia in pursuit of jet sale
Brazil’s Embraer Defense & Security has signed an MoU with the Colombian Aeronautical Industry Corporation (CIAC) to explore the expansion of their existing industrial and technical cooperation. This agreement comes as Embraer is looking to sell its KC-390 Millennium aircraft as a potential replacement for Brazil’s existing fleet of C-130H Hercules aircraft.
Turkish firms expand maritime cooperation in Italy
Turkish software specialist Havelsan and shipbuilder VN Maritime signed a strategic cooperation agreement with Italy’s Piloda Defence on 8 April to cooperate on the production of manned, unmanned, and hybrid maritime platforms in Italy.
Elbit secures Greek contract for PULS system
The Greek Ministry of National Defense has awarded Israel’s Elbit Systems a contract to supply 36 PULS artillery rocket systems to the Hellenic Armed Forces. Elbit will collaborate with local industries in areas including technology transfer, reportedly related to selected subsystems, electronics, support infrastructure, and know-how sharing.
Main headlines from this issue
Defence expert examines offsets as a US foreign policy instrument
In what circumstances does the US President decide to go “hands on” for offsets as a foreign policy tool? This is the central question that Brian Hobbs, an independent consultant with expertise in defence exports, explores in his latest book, US Defense Industry Offsets: The Presidential Exception for National Security, published as a part of the Routledge Advances in Defence Studies book series.
Spain to locally develop and produce Hanwha howitzers
South Korea’s Hanwha Aerospace and Spain’s Indra Group have signed a binding agreement to jointly develop and manufacture a Spanish variant of Hanwha’s K9 self-propelled howitzers locally for the Spanish Armed Forces. Through the agreement, signed on 24 March, Indra formalised Hanwha as the technology partner that would provide the platform for Spain’s artillery modernisation plan.
Boeing Australia to export locally developed UCAV to Germany, Rheinmetall to act as local partner
Boeing Defence Australia has entered a strategic partnership with Rheinmetall to offer Germany the MQ-28 Ghost Bat unmanned combat aerial vehicle (UCAV) previously developed by Australia. Rheinmetall will act as the system manager in Germany and will tailor the UCAVs to the Bundeswehr’s requirements in partnership with Boeing Defence Australia.
Belgium to build first national security satellite with US firm
Belgian Defence (the Belgian armed forces) has awarded US space and defence company Redwire a contract to build and deliver MATTEO, the country’s first national security satellite. Redwire will cooperate with Belgium’s Aerospacelab to jointly develop the satellite.
Poland expands defence cooperation with Estonia
Estonia’s Frankenburg Technologies signed a long-term cooperation framework agreement with Polska Grupa Zbrojeniowa (PGZ) relating to counter-unmanned aerial systems, while Milrem Robotics signed an MoU with PGZ to explore potential areas of collaboration, with a focus on unmanned ground vehicles.
Brazil to produce BAE vehicle components
In an attempt to sell more land platforms to Brazil, BAE Systems Hägglunds, the Swedish arm of the British prime, has partnered with Knightec Group Brazil, to locally manufacture gear housings for its BvS10 amphibious all-terrain vehicles through a transfer of technology.
Main headlines from this issue
Brazil launches funding initiative for defence tech innovation
Brazil’s federal innovation funding agency, the Funding Authority for Studies and Projects, has launched an initiative to support innovation across its domestic defence industrial base, with a focus on localising R&D and reducing dependence on foreign technologies.
Kongsberg strengthens partnership with Belgian industry
Kongsberg Defence & Aerospace has signed letters of intent with Belgian companies Feronyl, Advionics, and Sioen Industries related to Belgium’s planned procurement of the NASAMS air defence systems. The agreements were signed at the Brussels European Defense Exhibition and Conference held on 12–14 March.
Hanwha begins delivery of industrial cooperation commitments in Estonia
South Korea’s Hanwha Aerospace announced a direct investment package of close to EUR100m (USD115m) as part of Estonia’s purchase of the K239 Chunmoo rocket artillery systems last year.
Navantia offers industrial cooperation for Danish frigate purchase
Spanish shipbuilder Navantia announced on 27 February that it had offered Denmark a strategic cooperation framework to support the country’s naval programmes. The offer came in response to Denmark’s naval expansion plan that was announced in April 2025, which reportedly includes the acquisition of new frigates from 2030 onwards.
TKMS to develop torpedoes with Indian firm through tech transfer
Germany’s TKMS signed a teaming agreement on 10 March with India’s VEM Technologies Pvt Ltd to jointly develop heavyweight torpedoes for the Indian Navy through a transfer of technology. Under the agreement, ATLAS ELEKTRONIK, TKMS’s submarine systems subsidiary, will transfer torpedo technology, software licences, and production processes to the Indian partner.
Hungary to co-produce additional Turkish tactical vehicles
Turkey’s Nurol Makina signed an agreement on 2 March to co-produce 800 of its Gidran 4X4 vehicles in Hungary over the next five years, in cooperation with Hungarian vehicle manufacturer Rába Automotive Holding Plc and its parent company 4iG Space and Defence Technologies. This marks Hungary’s second purchase of the Turkish tactical vehicles.