Despite the challenges posed for Israel’s defense industries at home and abroad by the war that began on October 7, 2023, exports continue to break records: $19.2 billion in 2025, the Ministry of Defense reports. This is a jump of about 30% from 2024, as well as a doubling in five years and a quadrupling in a decade.

A record number of GTG (government-to-government) deals were reported totaling about $10 billion - over 50% of the transactions. This reflects a growing trend in the industry, in which defense ministries act as an umbrella for major deals. This stems from the requirement to transfer knowledge and production lines abroad from the transactions, in amounts that may reach about 30% in many cases.

Unprecedented amounts

A geographical breakdown shows there was growth in deals with the Abraham Accords countries (the UAE, Morocco and Bahrain), which accounted for 15% of deals, compared with 12% in 2024. Europe had seen a surge to 54% in 2024 due to the Arrow 3 sale to Germany for about $3.5 billion, and in 2025 this fell back to about 36%. Asia-Pacific, an arena affected by the Chinese threat, rose from about 23% to about 32% of deals in 2025.

The Arrow 3 deal also led to a surge in the proportion of air defense out of the deals in 2024 from about 36% in 2023 to about 48%. In 2025 air defense systems fell to 29% of export deals, 22% of deals were for surveillance systems and 11% for radar and electronic warfare.

53% of the total came from deals of more than $100 million, compared with 57% in 2024. 13% were for deals ranging from $50-100 million; 19% for deals of $10-50 million; and the remaining 15% were transactions for smaller amounts.

Over the past year a new challenge has confronted defense companies, through the depreciation of the shekel, which in some cases affects the profitability of defense industry transactions by 20%. Combining this problem with the state's unprecedented debts to the defense industries for the 2026 defense budget, weighs heavily on the companies.

An expression of the quality of Israeli industry"

"The sharp jump in defense exports is an expression of the quality of Israeli industry, of global demand, of the IDF's operational successes, and of our unique ecosystem," says Ministry of Defense director general Maj. Gen. (res.) Amir Baram. "Our force-building budget relies largely on these partnerships, but we must not be satisfied with this. As part of a defense industry policy, we must promote complementary measures of investments in R&D and expansion of production lines in the industry."

Brig. Gen. (res.) Yair Kulas, Director of SIBAT (International Defense Cooperation Directorate) at the Ministry of Defense notes that, unlike in the past, Israel is no longer the only country in the world with the combat proven label. Today, Ukraine manufactures products that it uses on the battlefield, and then markets them.

He says, "Many countries in the world have increased their defense and equipment budgets, and are interested in Israeli industry," Kulas stresses. "Israel’s defense industry is proactive, dynamic, and creates effective solutions in the air, at sea, and on land, at the cutting edge of technology. Behind the numbers stands an industry that has demonstrated a unique ability in the world - to provide the IDF with armaments and systems for a full military campaign, while expanding export markets and signing numerous deals with governments and customers around the world."

Published by Globes, Israel business news - en.globes.co.il - on June 2, 2026.

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