Ukraine’s Prospects for Expanding her Arms Industry into Exports

Ukraine’s war with Russia has forced her to build an arms industry at unprecedented speed. What began as a desperate effort to produce drones, shells and vehicles for survival has become one of Europe’s fastest-growing defence sectors. Factories that once made civilian goods are now producing loitering munitions, small arms and artillery shells; Ukrainian engineers have pioneered battlefield software such as Delta and GIS Arta; and networks of small workshops, backed by private and diaspora capital, have scaled up to produce tens of thousands of drones per month. The natural question now arises: can Ukraine extend this wartime arms production into a durable export sector?

Domestic Foundations

Ukraine’s defence industry rests upon two pillars. First, she inherited substantial military-industrial capacity from the Soviet Union. Shipyards in Mykolaiv, aircraft plants in Kharkiv, and tank workshops in Kharkiv and Lviv testify to that legacy. Second, necessity has spurred innovation. The decentralised model of Ukrainian drone production has proved remarkably resilient under bombardment: components are sourced globally, designs are open-source or rapidly iterated, and workshops are small enough to relocate when targeted. These qualities would make Ukrainian arms attractive abroad, since they combine low cost, technological adaptability, and independence from the slow bureaucracies that dominate Western procurement.

Potential Export Markets

The demand for inexpensive, battlefield-tested weapons is considerable. States with limited budgets but growing security threats—particularly in Africa, the Middle East and parts of Asia—may prefer Ukrainian drones and artillery systems over costly Western alternatives. Loitering munitions and first-person-view drones can be produced for a fraction of the cost of American or Israeli systems, yet they have been tested in Europe’s largest war since 1945. Moreover, Ukraine’s missile and air defence developments, still modest but advancing, could appeal to countries unable to purchase restricted Western systems.

There is also a potential market within NATO and the European Union. Many Eastern European states are already closely aligned with Ukrainian supply chains, and joint ventures could see Ukraine providing components or full systems to Poland, the Baltic states or Romania. The interoperability gained during wartime—where Ukrainian and NATO forces have shared intelligence, logistics, and software platforms—creates further grounds for export partnerships.

Political and Legal Obstacles

Exporting arms is not simply a matter of producing them. Ukraine is heavily dependent upon Western finance, and her export permissions may be constrained by conditions tied to aid. NATO and EU states may be reluctant to see Ukrainian weapons sold to regimes with poor human rights records, fearing reputational damage or proliferation risks. There is also the problem of corruption: international buyers will hesitate unless procurement processes are transparent, prices are stable, and end-user monitoring is credible. Ukraine’s defence industry must therefore undergo regulatory reform and institutional oversight if it is to gain trust as an exporter.

A further difficulty lies in intellectual property and technology transfer. Much of Ukraine’s battlefield advantage derives from close integration with Western intelligence and digital systems. How far she can commercialise those without violating security agreements is an open question.

Strategic Benefits

If Ukraine succeeds in building an export sector, the gains would be substantial. Foreign sales could bring in hard currency, easing dependence upon international loans and grants. A successful export industry would anchor Ukraine in the global defence economy, making her a permanent supplier rather than a perpetual recipient. It would also help her retain skilled engineers and workers after the war: rather than emigrate, they could stay to build a domestic arms economy with global reach. Strategically, arms exports might give Ukraine diplomatic leverage, as states that purchase her weapons acquire a vested interest in her security and survival.

Towards a resilient wartime economy

Ukraine’s wartime experience has forged an arms industry of remarkable creativity, resilience and efficiency. Whether she can translate that into an export sector depends upon three conditions: maintaining quality control and transparency, navigating Western restrictions, and identifying markets that will value low-cost, battle-tested systems. If those hurdles are overcome, Ukraine could emerge not only as Europe’s shield but as one of the world’s new armourers, transforming a war-driven necessity into a permanent source of economic and diplomatic strength.