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Volume 2025
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.
Main headlines from this issue
Canada’s ITB Policy takes centre stage at European conference
The DKF Autumn conference focused on the Canadian Industrial and Technological Benefits (ITB) policy. Presenters maintained a positive outlook on how Canada has designed its industrial participation policy and how Innovation, Science and Economic Development (ISED), the body that administers the ITB policy, works with foreign obligors.
GCAP partners to establish joint venture this year
The Global Combat Air Programme partners, the UK, Italy, and Japan, signed the terms of collaboration on a joint venture on 13 December in London. Efforts are on track to meet the aircraft’s scheduled in-service date of 2035. Industry partners, BAE Systems, Leonardo and JAIEC confirmed that they would hold equal stakes in the JV, which is to be established and named by mid-2025.
Ukraine begins licensed assembly of Czech rifles
Ukrainian Defense Industry (UDI) announced on 13 December that it had started assembling CZ BREN 2 rifles under licence from Česká zbrojovka, a subsidiary of the Czech Republic’s Colt CZ Group in November 2024. The cooperation involves a transfer of technology and future production of the rifles in Ukraine.
Embraer to cooperate with Portuguese industry on attack aircraft
The Portuguese Ministry of National Defence signed a contract with Brazil’s Embraer on 16 December for 12 A-29N versions of the Super Tucano light-attack aircraft to equip the Portuguese Air Force. Separately, soon after finalising the Tucano contract, Embraer set up its first European office, in Lisbon, Portugal, on 17 December.
Indra-Edge to set up radar joint venture in Abu Dhabi
The UAE’s EDGE Group and Spain’s Indra reached an agreement on 18 December to establish PULSE, a joint venture aimed at fostering local capabilities for the development and manufacture of radar systems. Indra will transfer technology to provide new radar capabilities to the UAE, alongside training and developing skilled local professionals.
US and India to jointly manufacture sonobuoys
US-based Ultra Maritime has partnered with India’s Bharat Dynamics Ltd. (BDL) to co-produce sonobuoys for undersea domain awareness. The two parties will supply and manufacture sonobuoys for the Indian Navy, with production split between the US and India. In India, BDL will carry out the co-production in Visakhapatnam.
Volume 2024
Main headlines from this issue
Switzerland to update Armaments Strategy
Switzerland will publish a revised Armaments Strategy in the summer of 2025. This will be followed by an update to pass the country’s offset policy into Swiss law in 2026. The updated law will merge new initiatives with existing policy and will include an ordinance and a directive containing further details related to the practice of offsets.
Denmark to update Defence Strategy, enhance industrial cooperation
Denmark will update its National Defence Industrial Strategy in 2025 and will look into how its industrial cooperation (IC) guidelines can be made more effective for Danish companies. Furthermore, the country will allow foreign companies to complete projects in Ukraine to fulfil their IC obligations to Denmark.
Canadian ITB Policy Report “insufficient”, says Auditor General
ISED, the Canadian government’s offset agency, published its Fall 2024 Industrial and Technological Benefits (ITB) Policy Annual Report on 26 November. The following week, the Office of the Auditor General of Canada published an audit reporting that ISED does not sufficiently monitor the costs or benefits of the ITB policy.
Latvia to continue local production of Patria vehicles
The Latvian MoD signed a follow-up contract with Finnish prime Patria on 14 November for the delivery of 56 armored vehicles under the Common Armoured Vehicle System (CAVS) programme. Defence Partnership Latvia SIA, a joint venture between Patria and the local firm SIA Unitruck, manages local production at the Valmiera facility.
Kongsberg to supply RAS systems for Indian ships
Kongsberg Maritime has partnered with Hindustan Shipyard Ltd. (HSL) to supply electric replenishment-at-sea systems for the Indian Navy’s Fleet Support Ships project. The Norwegian company will provide its technology related to the systems to be fitted on the five vessels being built locally by HSL and Larsen & Toubro.
Poland secures funding for Hanwha contracts after delays
The Polish Armament Agency has finally secured funding to procure additional Chunmoo multiple rocket launch systems and K9 howitzers from Hanwha Aerospace. On 27 November, Poland reached a USD4.2bn credit arrangement with the state-owned Bank Gaspodarstwa Krajowego to finance the purchases.
Main headlines from this issue
DoD representatives explain US approach towards offset, could revisit policy
Dean Vlahopoulos, principal deputy general counsel, and Jorge Aguilera, weapons policy analyst, both from the DSCA, maintained that the US viewed offsets as "inefficient and market-distorting”, at the same time admitting the irony in its involvement in administering offsets, when domestic industry indulged in such transactions. However, Vlahopoulos remarked that there is a “new sort of wind” in the US, propelling a new look at offsets.
Malaysia focuses on offset output, moves away from value-based approach
Malaysia has moved from a credit value–based industrial collaboration policy to an outcome-based one. Under the new approach, Malaysia will not measure the offset projects in terms of its credit value but, rather, on the outcome the project creates for its local industry.
Korean primes sign defence agreements with Peruvian industry
South Korea and Peru have signed several MoUs to enhance bilateral defence industry collaboration. Hyundai Heavy Industries and Peru’s state-owned shipyard, SIMA, signed an MoU for joint submarine development, while Korea Aerospace Industries signed an MoU with SEMAN, for the joint production of KF-21 fighter jet components. Furthermore, Hyundai Rotem signed an agreement with Peru’s Army Weapons and Ammunition Factory to strengthen cooperation on ground equipment.
India and Japan to co-develop UNICORN antennae
India and Japan inked a Memorandum of Implementation on 15 November in Tokyo to jointly develop Unified Complex Radio Antenna (UNICORN) masts for the Indian Navy. Once implemented, the agreement will be the first case of co-development and co-production of defence equipment between India and Japan.
Embraer boosts industrial cooperation with Dutch industry
Embraer established partnerships on 21 November with Fokker Services Group, the Royal Netherlands Aerospace Centre, and Multisim to enhance its industrial and research cooperation relating to the Netherlands’ procurement of the C390 Millennium aircraft.
Rheinmetall wins Canadian vehicle contract
Germany’s Rheinmetall has won a USD232m contract to supply the Canadian Armed Forces with 85 HX 8x8 heavy recovery vehicles under Canada’s Enhanced Recovery Capability project. An additional in-service support contract, worth USD21m, has also been awarded to the German prime.
Main headlines from this issue
Korea revises offset guidelines to support its SMEs
Korea’s Defense Acquisition Program Administration revised the country’s Offset Trade Guidelines on 29 October to help foster its small and medium-sized enterprises (SMEs) and help them enter global supply chains.
Australia signs local production contracts with Thales and Lockheed Martin
Australia is boosting the local production of weapons under its Guided Weapons Explosive Ordnance Enterprise. The Australian government announced on 30 October that it had selected France’s Thales to construct a domestic forging capability for the production of artillery ammunition and that Lockheed Martin would establish a facility for the local manufacture of Guided Multiple Launch Rocket Systems.
Competitive tender could delay India’s fighter jet programme
The Indian government is deciding between a government-to-government contract or a multi-vendor and competitive tender process for the procurement of 114 Multi-Role Fighter Aircraft for the Indian Air Force. To avoid a “Rafale-like controversy” related to the contract, India is considering adopting a “transparent procurement method” for the deal.
Thailand to produce Swedish solar cells
Swedish defence prime Saab and solar energy firm Midsummer AB signed an MoU on 4 November to explore a long-term partnership and industrial cooperation in Thailand. This is part of Saab’s adherence to Thailand’s offset policies which demand benefits for its defence industry and economy against foreign purchases.
Boeing and Safran to set up local facilities in Morocco
Morocco will establish local aerospace R&D and MRO facilities in partnership with US prime Boeing and France’s Safran Aircraft Engines under agreements signed at the Morocco-France Entrepreneurial Meeting in Rabat on 28 October and during the Marrakech Air Show on 30 October–1 November.
Rheinmetall to set up joint venture in Croatia
Germany’s Rheinmetall announced a strategic partnership on 28 October with Croatian manufacturer of unmanned ground systems (UGS) DOK-ING to develop and market advanced UGS solutions. Separately, Croatia will procure Leopard tanks from Germany at a discounted price, against the delivery of used tanks and IFVs to Ukraine.
Main headlines from this issue
India and US seal drone deal after eight years of negotiations
India has finally concluded a USD4b agreement with the US for the procurement of 31 MQ-9B high-altitude long-endurance drones manufactured by General Atomics. The deal was signed on 15 October, alongside a contract to establish an MRO facility for the unmanned aerial vehicles in India.
Brazil to enhance its defence industrial base
Brazil’s Ministry of Defense signed a strategic partnership agreement on 8 October with the National Industry Observatory, under the National Confederation of Industry. The cooperation agreement is valid for six years and aims to strengthen Brazil’s defence agenda and identify opportunities for its Industrial Defense and Security Base in domestic and export markets.
Saudi Arabia steers aerospace collaborations
Saudi Arabia has expressed an interest in the purchase of over 100 of Turkey’s indigenously developed and built KAAN fighter jets. The potential collaboration could include technology transfers and support for local production of the jets. Subsequently, Saudi Minister of Industry and Mineral Resources Bandar Alkhorayef met with Italy’s Leonardo to discuss expanding relations between the two parties.
Turkey’s Otokar wins Romanian vehicle contract
Romania has awarded Turkey’s Otokar its USD934m light armoured vehicles programme contract for the Cobra II 4X4 vehicle. Under the agreement, the first 278 out of 1,059 vehicles will be produced at Otokar’s facilities in Turkey. The remaining units will be manufactured in Romania in cooperation with local companies under a framework that is yet to be determined.
UK, Germany sign defence agreement to boost joint production
The UK and Germany will strengthen long-term defence industry cooperation under an agreement signed on 23 October. The agreement outlines joint production opportunities and proposes plans for Germany’s Rheinmetall to open a new factory in the UK.
Pending approvals delay delivery of KAI aircraft to Poland
Poland is facing delays in the delivery of 36 FA-50PL combat aircraft from Korean Aerospace Industries, as the US has yet to provide legislative approvals for components requested on the aircraft by Poland.