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Volume 2025
Main headlines from this issue
International firms use industrial cooperation to target EU market
Non-EU UAV suppliers are leveraging industrial cooperation to enter the EU market. At the Paris Air Show last month, the US’ Anduril and Turkey’s Baykar signed partnership agreements with Germany’s Rheinmetall and Italy’s Leonardo to develop platforms for the European market.
Offsets more beneficial than one-off tech transfer : Indonesian defence official
First Marshal S. Arief Hardoyo, Secretary of the Indonesian Defence Ministry’s Research and Development Agency, has said that offset cooperation in the defence sector would be more beneficial for Indonesia compared to mere transfer of technology (ToT). He made this statement citing risks associated with technology transfer while advocating for the use of offsets.
News out of Indo Defence 2025
Foreign OEMs, including France’s Naval Group, KNDS France, Italy’s Fincantieri and Türkiye’s Roketsan, strengthened their defence partnerships with Indonesia by signing agreements involving joint development and production, local MRO, and technology transfer at the Indo Defence 2025 expo held in Jakarta on 11–14 June.
US reviews AUKUS partnership under “America First” agenda
The Pentagon announced on 11 June that it was reviewing the AUKUS alliance to assess whether the partnership supported US defence priorities in line with President Donald Trump’s “America First” agenda.
CAE partners with Sikorsky, Saab on sensor systems & training
CAE will cooperate with Lockheed Martin’s subsidiary Sikorsky Aircraft to integrate a digital CAE Magnetic Anomaly Detection-Extended Role sensor system aboard US Navy and Royal Australian Navy MH-60R maritime helicopters. Separately, CAE and Saab will develop training solutions for Canada’s future submarine fleet under the Canadian Patrol Submarine Project, if awarded the contract.
Ukraine advances cooperation in Europe
Ukraine has signed industrial partnership agreements for defence production with the UK and Denmark and with Norway’s Kongsberg. While the UK and Denmark will produce Ukrainian equipment domestically, Kongsberg has entered into agreements with two local companies for the production of air-defence missiles and unmanned surface vessels in Ukraine.
Main headlines from this issue
Ukraine launches joint production initiative with partner countries
Ukraine has launched a new international initiative for the joint production of Ukrainian weapons in partner countries. Ukrainian Defence Minister Rustem Umerov announced the initiative on 4 June at the 28th Ukraine Defense Contact Group meeting (‘Ramstein’ format).
Thailand picked offset-heavy Gripen offer over F-16s
The Royal Thai Air Force (RTAF) has decided on the Saab Gripen E/F as its future multi-role fighter jet, with offsets playing a decisive role in the selection. The Swedish offer, selected on 4 June, includes a long-term offset package which reportedly equates to around 155 percent of the contract value.
Turkey advances cooperation in Indonesia and Finland
Turkey signed a USD10bn agreement with Indonesia for the sale of its indigenously developed KAAN fighter jet on 11 June. This followed a defence industry cooperation MoU signed between Turkey and Finland earlier this month, to enhance joint production, technology exchange, and capability development.
Canadian firm expands cooperation with Singapore and Czech Republic
Canadian armoured vehicle company Roshel is engaging in offset projects, as both a recipient and an obligor. Last month, Roshel signed an agreement with Singapore’s ST Engineering to produce the ExtremV vehicle in Canada and a strategic agreement with OMNIPOL to begin production of Senator armoured vehicles in the Czech Republic.
Spain to co-produce Turkish jet and European missile
Turkish Aerospace Industries (TAI) has signed an MoU with Airbus Defence and Space and up to 15 Spanish companies to co-develop a new jet trainer based on TAI’s Hürjet combat aircraft. Separately, European aerospace company Destinus has entered a strategic partnership with Spain’s Grupo Oesía to cooperate on the RUTA long-range missiles.
Rosoboronexport official announces offset discussions worth over $30bn
Russia’s Rosoboronexport is reportedly discussing cooperation projects involving joint production and technology transfer with 20 partner countries valued at over USD30bn. The state-owned export agency’s general director Alexander Mikheev confirmed this to Russian media outlet TASS last month.
Main headlines from this issue
Offsets have made Turkey self-sufficient : Govt official
Murat Çizgel, head of the industrialisation department at Türki̇ye‘s Secretariat of Defence Industries (SSB), gave a presentation at GICA, summarising his country’s changing approach to enhancing its defence industry. Türki̇ye is working on adopting a new approach to industrialisation that will move its current project-based approach to a company-based one.
UAE signs cooperation agreements at domestic forum
The fourth edition of the Make it in the Emirates forum was held in Abu Dhabi on 19–22 May. This issue of the newsletter covers agreements signed on the sidelines of the event, which include cooperation on tanks and aerospace capabilities, radars, land systems and carbon anode exports.
Japan expands cooperation with Patria and Lockheed
Japan Steel Works is preparing to begin the local production of Finland’s Patria AMV 8x8 armoured vehicles, while the US’ Lockheed Martin has selected Fujitsu as the component units supplier for its SPY-7 radar.
Reliance to supply ammo components to Rheinmetall
Germany’s Rheinmetall and India’s Reliance Defence have entered a strategic partnership for the production of ammunition. Under the MoU signed on 22 May, Reliance Defence will supply Rheinmetall with explosives and propellants for medium and large calibre ammunition through a local production facility.
Spain to produce Turkish vehicles and US missile components
Turkey’s FNSS Defence Systems Inc and Belgium’s John Cockerill Defence will partner with Spain’s Technology and Security Developments (TSD) and Grupo Oesía to produce a 6x6 cavalry vehicle platform. Meanwhile, Lockheed Martin España signed an industrial cooperation agreement to support local firms Sener and Tecnobit-Grupo Oesía in the production of PAC-3 MSE components for global export.
Australia and Greece partner on weapon systems assembly
Australia’s EOS Defence Systems and Greek defence and security firm EODH have signed an MoU to cooperate on the assembly in Greece of remote weapon systems (RWS). Under the agreement, EODH will oversee the local assembly of the EOS-designed RWS for upcoming Greek defence programmes.
Main headlines from this issue
Primes should take offset obligations “seriously”, says Romanian official
At the GICA conference in Bucharest, Romania heavily promoted the need for primes to treat offset activities “very seriously” in order to keep the country secure, and expressed that failing to create capabilities in Romania would pose a “big issue” for the country.
Ukraine grants US preferential access to its minerals
Ukrainian President Volodymyr Zelenskyy has ratified the US-Ukraine Economic Partnership Agreement following months of negotiations. The deal will grant the US preferential access to Ukraine’s mineral resources in return for wartime aid.
India and France finalise Rafale Deal
India and France have finalised the much-awaited Intergovernmental Agreement for the procurement of 26 Rafale fighter jets from Dassault. Under the USD7.4bn deal, Dassault will establish a production facility in India for the jet’s fuselage as well as MRO facilities for its engines, sensors, and weapons. The deal also includes technology transfer for the integration of indigenous Indian weapons on the jets.
Poland and Saudi Arabia deliver local produced Lockheed missile components
Lockheed Martin’s local partners, Wojskowe Zakłady Lotnicze Nr 1 (WZL1) in Poland and AIC Steel in Saudi Arabia, have respectively completed the production and delivery of the PAC-3 MSE and THAAD missile components at their domestic facilities for the first time.
Korean primes offer localisation to Canada and Chile
Hanwha Ocean and HD Hyundai Heavy Industries (HHI) have jointly submitted a proposal to supply the Royal Canadian Navy up to 12 KSS-III submarines. The proposal includes plans to build facilities for maintenance of the submarines in Canada. Meanwhile, Hanwha Aerospace has expressed interest in supplying the Chilean Army with armoured vehicles in an offer that includes localisation.
Romania to produce Turkish vehicles and US drones
Turkey’s land systems manufacturer Okotar has signed an agreement with Romania’s Rheinmetall Automecanica SRL to establish a joint venture in Romania for the local production of Cobra II vehicles. Separately, Romanian manufacturer Carfil will begin the local production of drones in cooperation with US firm Periscope Aviation.
Main headlines from this issue
NYT report alleges export of British tech to Russia via Indian firm
A New York Times report has alleged that British aerospace manufacturer HR Smith Group’s subsidiary Techtest exported USD2m worth of sensitive technology to Russia via India’s state-owned Hindustan Aeronautics Ltd (HAL). All three entities have denied the allegations.
US report lists offsets as a barrier to foreign trade
The Office of the United States Trade Representative introduced the 2025 National Trade Estimate Report on Foreign Trade Barriers on 31 March. The report lists offsets in government procurements as a foreign trade barrier for the US.
CARACAL to manufacture firearms with Indian industry
CARACAL inaugurated a small arms manufacturing facility in Hyderabad on 21 April, in cooperation with India-based ICOMM Tele, a subsidiary of Megha Engineering & Infrastructures Ltd (MEIL), marking the first ever transfer of technology in defence articles from the UAE to India.
Israel and Russia strengthen cooperation in Peru
Israel Weapon Industries has launched an assembly plant in Peru, in collaboration with local defence industry firm FAME. Separately, Russia’s Rosoboronexport has announced plans to establish a new MRO centre in Peru to service Russian military helicopters locally.
Hanwha to form JV in Poland for missile production
Hanwha Aerospace and WB Electronics signed a term sheet agreement on 15 April to establish a joint venture to manufacture CGR-080 guided missiles in Poland.
Boeing commits to 85 percent Indonesian content for jet purchase
Boeing has offered to deliver on 85 percent local content and offset commitments if the Indonesian government finalises its planned purchase of 24 F-15EX fighter jets.
Main headlines from this issue
Industrial cooperation is the key to success, says Czech official
Radka Konderlová, the director general of the Czech MoD’s Department of Industrial Cooperation, maintained throughout her presentation at the DKF Spring Conference that industrial cooperation was of utmost importance and “the key to success” for the Czech Republic’s defence industry.
Ukraine to develop defence procurement framework this year
Ukraine plans to develop a new legislative framework for defence procurement this year, revealed Glib Kanievskyi, director of Ukraine’s Procurement Policy Department, at the Conference on the Coordination of the Strategic Defence Procurement Review (SDPR) held in Kyiv on 3 April.
KNDS offers local production of vehicles to Greece
KNDS France has signed an agreement with Greek manufacturer METLEN Energy & Metals for the local production of VBCI Infantry Fighting Vehicles (IFVs). Under the partnership, KNDS will transfer know-how related to the IFV’s aluminium armour. The vehicle’s welded structure will also be locally produced at Metlen’s facility in Volos.
EDGE Group strengthens footprint in Brazil
The UAE’s EDGE Group has signed multiple agreements with the Brazilian Navy to cooperate on the joint development of defence systems. The contracts, aimed at strengthening EDGE’s footprint in Brazil, were inked at the LAAD Defence & Security 2025 conference held in Rio de Janeiro on 1–4 April.
South Africa to produce and maintain Embraer aircraft
Brazil’s Embraer signed an MoU on 3 April with South African aerospace and defence firm Denel to cooperate on the KC-390 Millennium aircraft. The collaboration will focus on aerostructures manufacturing and MRO activities.
Indonesia to produce Turkish systems with tech transfer
Turkey’s Roketsan has signed an agreement with Indonesia to set up a facility that will locally produce ATMACA anti-ship missiles, cruise missiles, and smart ammunition systems. The partnership will include a transfer of technology and training programmes for Indonesian engineers and technicians.
Main headlines from this issue
India to cut down defence procurement timelines
India’s Defence Acquisition Council announced on 20 March that the Ministry of Defence had approved guidelines to shorten the timelines for the country’s defence procurement process. Cutting procurement timelines may impact India’s localisation initiatives.
Canada diversifies defence ties amid US tariff concerns
Canada is diversifying its international defence partners amid the rise in US tariffs. To this end, Canada will develop an arctic radar missile-detection system with Australia and is discussing joining the EU’s military industry ReArm Europe Plan. The country has also launched a review of its planned F-35 purchase from Lockheed Martin.
Nordic and Baltic countries invest in Ukraine
On 9 March, Ukraine's Defence Minister Rustem Umerov participated in the Nordic-Baltic Eight (NB8) meeting, where the defence ministers of Norway, Iceland, Denmark, Sweden, Finland, Estonia, Latvia, and Lithuania outlined new initiatives to support Ukraine.
Germany’s TKMS joins Norwegian frigate competition
German conglomerate TKMS has signed a letter of intent with Norwegian shipyard Ulstein Verft to cooperate on Germany’s bid for Norway’s frigate requirement. TKMS is offering its F-127 frigate design for the competition.
Turkey to bid for Thai frigate project
ASFAT, a Turkish state-owned defence contractor, signed a partnership agreement on 6 February with Thailand’s government-owned defence firm United Defense Technology (UDT) to bid for the Royal Thai Navy’s (RTN) Frigate Procurement Project.
France’s CMN to form JV with EDGE in Abu Dhabi
France’s CMN Naval and Emirati conglomerate EDGE Group have formally agreed to create an Abu Dhabi–based shipbuilding joint venture. The joint venture, AD NAVAL, announced on 19 March, follows an initial partnership agreement signed between the two parties at IDEX 2025.
Main headlines from this issue
India, US to negotiate defence agreements and review regulations
India and the US have announced that negotiations for the Reciprocal Defense Procurement agreement will take place this year. The two parties have launched several other defence initiatives, and will also review their respective arms transfer regulations.
Australia launches AUKUS industry strategy amid “growing skepticism”
The Australian Submarine Agency released its first-ever AUKUS Submarine Industry Strategy on 7 March. The strategy outlines plans to develop in Australia the industrial capability required to deliver, operate, and sustain the country’s future nuclear-powered submarines (SSNs), to be produced under the trilateral AUKUS partnership.
Concluding remarks from IDEX 2025
In this issue of CTO, we cover cooperation agreements signed by US and Asian firms with Emirati companies on the sidelines of the International Defense Exhibition (IDEX 2025) held in Abu Dhabi on 17–21 February.
Poland and Slovakia advance defence industry cooperation
Poland and Slovakia have signed a Letter of Intent to jointly produce ammunition and cooperate on the procurement of air defence systems, armoured vehicles, and tanks. Signed in Warsaw on 24 February, the agreement covers four key areas, which all align with Poland’s current priorities.
Indo-Belgian JV to manufacture turrets in India
Belgium’s John Cockerill Defense and Indian defence technology company Electro Pneumatics & Hydraulics have announced a joint venture to manufacture turrets in India for the Zorawar light tank. JCD will bring technology and know-how to the venture, while EPH will focus on locally manufacturing the turrets.
Israeli firms expand missile operations in the US
Israel’s Rafael is establishing a joint venture with US firm Kratos Defense & Security Solutions to produce solid rocket motors in the US. The new venture, Prometheus Energetics, announced on 26 February, will be located in Indiana. Rafael will transfer technology to the new joint venture, and production at the facility is scheduled to begin in 2027.
Main headlines from this issue
Offsets & defence reforms in spotlight at AERO India
At the recent Aero India 2025, CTO witnessed discussions on India’s offset policy and the challenges faced by OEMs in executing offset contracts in the country due to restrictions relating to technology sharing. The discussions covered the upcoming changes to India’s Defence Acquisition Procedure (DAP) 2020 policy.
Trump demands access to Ukraine’s mineral resources in exchange for wartime aid
The US is asking for access to Ukraine’s mineral resources in exchange for providing military aid. US President Donald Trump has been negotiating a barter deal with Ukraine under which Ukraine would deliver minerals – materials that are critical for various defence technologies – to the US in exchange for long-term military aid.
European report finds lack of localisation requirements in battery ventures with China
A Transport & Environment report found a lack of technology transfer or local content requirements in battery partnerships between Europe and China, despite subsidies and investments made by European governments in Asian battery firms and factories. The report recommended that the EU use instruments to secure local content, as no rules or framework regarding technology/skills transfer or local content currently exists in Europe.
Philippines to acquire gunboats, submarines amid funding concerns
The Philippines is planning to acquire ten additional Acero-class patrol gunboats from Israel Shipyards Ltd, and is also seeking to procure at least two diesel-electric submarines under its ongoing Armed Forces of the Philippines (AFP) Modernization Program. However, the country is facing a shortage of funds for its planned defence modernisation projects.
Saudi Arabia needs to develop know-how before it can join GCAP
Saudi Arabia may be able to fulfil its hopes of joining the Global Combat Aircraft Programme (GCAP) by first setting up assembly lines for NH-90 helicopters and Eurofighters. According to Lorenzo Mariani, Leonardo’s co–general manager, Saudi Arabia could gain the know-how it needs to participate in the GCAP by setting up these assembly lines.
BAE signs MoU with Norwegian shipyard for frigate requirement
The UK’s BAE Systems has signed an MoU with Norwegian shipyard Hamek to cooperate on Norway’s ongoing maritime defence requirements. Norway also intends to establish a strategic bilateral partnership with the country whose frigate design is selected, coupled with close collaboration with the chosen prime to ensure opportunities for its local defence industry.
Main headlines from this issue
Belgium prioritises local manufacturing and tech development
Belgium’s new federal government, known as the Arizona coalition finalised the Arizona agreement 2025 - 2029 on 31 January, which introduces efforts to enhance the country's defence capabilities. Belgium intends to increase efforts to stimulate its domestic defence industry by prioritising local manufacturing and technological development.
UK report assesses GCAP workshare and management
The UK’s Defence Committee published a report on 14 January assessing the viability of the Global Combat Air Programme. The report cautioned that for the programme to be delivered on time and to budget, governments and industry partners must clearly define workshare agreements and carefully navigate “the complex web of relationships”.
Indonesian defence procurements hit by budget constraints
Indonesia is facing issues in financing its offset-heavy defence procurement projects owing to budget restraints under President Prabowo Subianto. The lack of government funding and planned budget cuts may delay upcoming defence procurements which include technology transfer and local production offers from foreign primes.
Damen signs new partnership agreement with South Africa
The Netherlands’ Damen Shipyards Group signed a strategic partnership agreement on 12 February with South Africa’s Department of Trade, Industry and Competition, as part of the country’s National Industrial Participation programme.
News out of Aero India 2025
CTO attended the AERO India 2025 air show and aviation exhibition in Bengaluru on 10-14 February. This issue features updates from the event, covering India’s cooperation with UK firms, and France’s Safran.
Turkey advances defence cooperation with Hungary and Germany
Turkey is bolstering its defence cooperation with partners in Hungary and Germany. Turkey and Hungary have established an industry working group, and have signed an agreement to promote cooperation, while Turkish defence company Repkon has signed an agreement to build an artillery filling factory in Germany.
Main headlines from this issue
UK suspends revised IP Policy, to revisit under new defence industrial strategy
After piloting its Revised Industrial Participation (IP) Policy for over a year, the UK has decided not to proceed further with officially introducing a revised version of its offset policy, for now. Instead, the UK may explore an alternative approach towards industrial participation through an Integrated Procurement Model (IPM). The UK is, however, still reflecting on the revised policy as part of developing its new Defence Industrial Strategy.
France and Germany set up JV for tank procurement
KNDS Deutschland, KNDS France, Rheinmetall Landsysteme, and Thales signed a shareholder agreement on 23 January to establish the Main Ground Combat Systems (MGCS) Project Company GmbH as a joint venture. The new firm will act as the prime contractor for the Franco-German MGCS project, which aims to develop a next-generation main battle tank.
Saudi Arabia expands cooperation with Italian firms
During a roundtable meeting in AlUla on 26 January, Saudi Arabia signed 26 MoUs with Italian defence companies, including Leonardo, Fincantieri, and ELT Group. Local signatories included Saudi Arabia’s Ministry of Investment (MISA), the General Authority for Military Industries (GAMI), SAMI Advanced Electronics Company (SAMI-AEC), and Shamal.
Turkey strengthens ties with Morocco and Saudi Arabia
Turkish defence firm Aselsan visited Morocco on 22 January to discuss potential collaborations in defence technology and the local production of arms to modernise and strengthen Morocco’s military capabilities. Separately, Turkey is boosting its ties with Saudi Arabia in hopes to increase exports to that country.
Thyssenkrupp set to win Indian submarine contract
German shipbuilder Thyssenkrupp Marine Systems (TKMS) and Indian defence public sector undertaking Mazagon Dock Shipbuilders Limited (MDL) have emerged as the sole contenders for India’s Project-75(I) under which six submarines are to be built locally for USD5.37bn.
Ukraine eyes co-production with France and Sweden
Ukraine has agreed to sign a bilateral agreement with Sweden, alongside expressing its interest in conducting joint production with France. The agreement with Sweden will support the implementation of joint defence industry projects, while Ukraine and France may jointly produce surface-to-air missile systems.
Main headlines from this issue
Ukraine amends procedure to develop and produce defence products
Ukraine adopted a resolution on 13 January to establish a mechanism that allows for the involvement of foreign companies in developing and modernising equipment for the Ukrainian Defense Forces. The resolution amends the procedure for developing and producing new types of defence products and establishes conditions for cooperation with foreign partners.
Local subsidiary to deliver Rheinmetall defence systems to Italy
Rheinmetall Italia, the Italian subsidiary of Germany’s Rheinmetall, will deliver a locally built Skynex air defence system to the Italian Army under an EUR73m (USD75m) contract. Rheinmetall Italia produces the Skynex system at its plant in Rome’s Tiburtina Valley and has previously built these systems for export to other Rheinmetall customers.
Pakistan to join Turkey’s KAAN fighter jet programme
Pakistan is officially on the path to joining Turkey’s KAAN fighter jet programme. The two countries are discussing the joint establishment and operation of a factory in Pakistan to produce a local variant of the fifth-generation jets developed by Turkish Aerospace Industries.
India to produce US drones with tech transfer
Indian drone manufacturer Avironix has announced a partnership with Lumenier to manufacture drones in India under a technology transfer agreement. The US firm will also help Avironix export its solutions to the US.
Peru begins construction of Korean naval vessels
South Korea’s Hyundai Heavy Industries and Peru’s state-owned shipyard Servicios Industriales de la Marina S.A. (SIMA), launched the construction of four advanced naval vessels for the Peruvian Navy on 10 January. The project involves a transfer of technology for the local construction of a frigate, a patrol vessel, and two landing ships for the Peruvian Navy.
Japan-Indonesia enhance defence ties, resume frigate co-development talks
Japan and Indonesia have agreed to enhance defence collaboration and will cooperate on technology transfer related to defence systems, alongside establishing a discussion forum for defence practitioners. Separately, the two nations agreed on 7 January to resume discussions for the joint development of naval vessels.