Ukrainian combat experience is invaluable. At the same time, Ukrainian solutions — particularly in the realm of low-cost drone systems — are unavailable to foreign buyers due to closed arms exports. Although President Volodymyr Zelensky announced the opening of the market, permits have in practice become mired in bureaucratic quicksand. This prevents manufacturers not only from earning revenue but from developing at all.
Meanwhile, the window of opportunity for Ukrainian miltech in the world is closing rapidly. For example, Airbus recently successfully tested its own interceptor drone, the Bird of Prey, equipped with a relatively inexpensive missile from an Estonian manufacturer, while Germany is set to sign a €2.4 billion contract for interceptor drones with Rheinmetall. For Ukrainian manufacturers, meanwhile, Zelensky brought back from the Middle East only framework agreements with promises of billions of dollars in the future. 
examined the problems of military exports and the solutions proposed by manufacturers.
President Zelenskyy negotiated the export of Ukrainian military solutions in Qatar
The export ban was justified at the start of the full-scale war
Since the beginning of the full-scale invasion, Ukraine has effectively frozen exports of domestically produced weapons. Legally, this decision was never formalized by any law or decree — but the de facto restriction existed. The head of the State Export Control Service, Oleksandr Pavlichenko, acknowledged this in a July 2022 interview with DW: "There are no bans, but obtaining an arms export permit from us is very difficult." Applications were accepted but not approved — because it "does not serve state interests." Lethal weapons were not exported at all.
The logic at the start of the full-scale invasion was understandable: the army needed everything that industry produced. However, by 2026 the situation had changed dramatically.
The Ukrainian interceptor drone P1-SUN (or "Pisyun") is a cheap ($1000–$5000) and effective means of combating "Shaheds" / Source: Texty.org.ua
Weapons manufacturers learned to produce more than the state can buy
Over 2.5 years of full-scale war, weapons production in Ukraine increased sixfold. Companies expanded their capacity and hit a ceiling: the state simply did not have the money to purchase everything produced. According to the Ukrainian Council of Arms Manufacturers, in 2026 Ukraine's defense industry is capable of producing $60 billion worth of goods. State procurement currently covers only half of production capacity.
The surplus of weapons available for export reaches 60%.
At the same time, selling the surplus abroad was impossible: the Interagency Commission on Military-Technical Cooperation (ICMTC), which was supposed to approve such decisions, had been without a quorum since May 2024. Commission members had either resigned or been reassigned. Export applications were simply not being reviewed.
Ukraine was able to quickly ramp up the production of various types of interceptor drones
Miltech began relocating not its products, but its production
The business response was predictable. If the state doesn't buy and won't allow sales, companies move to where it is permitted. According to research by the Technological Forces of Ukraine (TFU), in February 2025, 85% of weapons manufacturers were considering relocation or had already done so. Among the reasons cited — beyond security concerns — 61% of respondents pointed to the inability to export products, and 56% to insufficient state orders.
Production was relocated abroad primarily to ensure uninterrupted supply to the Ukrainian military. For example, Skyeton opened production in Slovakia; UkrSpecSystems, the manufacturer of the PD-2 and Shark reconnaissance UAVs, opened facilities in Poland and the United Kingdom; DeViRo, the manufacturer of the Leleka-100 UAV, moved to the Czech Republic. But the share of foreign or joint ventures — which will naturally want to sell their products abroad — is also growing. For instance, the Czech company U&C UAS, founded by Ukrainian drone manufacturers DeViRo, will supply drones to India. In 2026, the opening of 10 joint factories for the production of Ukrainian drones abroad is planned.
As of March 2026, according to one industry association, up to 100 Ukrainian miltech companies had relocated abroad. In some cases, to circumvent the ban on technology exports, design modifications were made to products — making them formally different items.
STORK LR and MACE UAVs manufactured by U&C UAS. Photo by U&C UAS
Ukraine is also losing specialists, and with them, knowledge: Ukrainian engineers and developers working abroad are joining foreign companies, helping other nations create their own analogs of Ukrainian developments. The state, in trying to retain technologies, has in practice stimulated their free transfer to competitors.
Zelensky announced the opening of arms exports several times
Business pressure and the logic of the situation eventually forced the authorities to respond. Zelensky's first public statement about opening arms exports came on September 24, 2025, at the UN General Assembly. Four more followed: in October and December 2025, the president announced export platforms, concepts, and representative offices in Berlin. On February 8, 2026, Volodymyr Zelensky wrote on Telegram: "Today Ukraine opens arms exports." That same day he signed a decree on the renewed composition of the ICMTC — the commission resumed operations on February 10.
Manufacturers breathed a sigh of relief. The TFU recorded that the share of companies planning relocation dropped from 85% to 51% following these announcements. The state seemed to have listened.
Sting interceptor drone from Wild Hornets / Source: defence-ua
The commission began working, but export permits are almost nonexistent
A month and a half passed. As of late March 2026, the ICMTC had held three sessions. More than 30 companies received independent export authority — meaning the right to negotiate and conclude agreements without an intermediary special exporter. But permits for the actual sale of finished products, according to industry representatives, are virtually nonexistent.
The reason lies in the structure of the procedure itself. To obtain a permit, a manufacturer submits an application to the State Export Control Service, which initiates an interagency request; the Ministry of Defense confirms the surplus; then it goes to the ICMTC, then to the National Security and Defense Council.
According to Serhiy Prytula, founder of a charitable foundation and adviser to the Minister of Defense, the commission's structure is "too cumbersome for adequate dialogue with private manufacturers," since it includes representatives from nearly two dozen institutions — from the Security Service of Ukraine to the Foreign Intelligence Service, from the NSDC to the Main Intelligence Directorate. Accordingly, the standard permit review period reaches 90 days. An expedited option — under two weeks — is available only to residents of Defence City, a special legal zone that is itself still in the process of being established.
The National Association of Ukrainian Defense Industry (NAUDI) confirmed in a statement dated March 31 that exports are "stalling": "We note with regret that the system still operates more as a barrier than a permitting one. Political declarations on unblocking exports do not yet, unfortunately, correlate with actual decisions."
The association proposed a concrete mechanism: a 14-day application review period with a "silence means consent" principle. If the Ministry of Defense does not plan to procure a particular type of product — the manufacturer receives the right to sell it.
Another inexpensive interceptor drone, "Shvidun", was recently adopted / Source: mod.gov.ua
Zelensky discovered Ukrainian defense factories built "behind the state's back"
On March 28, Volodymyr Zelensky gave journalists an example that demonstrated the futility of the closed-export policy. The president said he was aware of approximately 10 factories producing interceptors of Ukrainian origin that had been built "behind the state's back in various corners of the world." One company sold a thousand interceptors to a foreign country for $3.5 million — without warheads. That same country later approached Ukraine asking for explosives to be sent. Following this, the company received a €300 million state contract.
When the official channel doesn't work, the market finds an unofficial one. A state that for years blocked legal exports and failed to build a functioning permitting mechanism itself created the conditions for a shadow market — and is now surprised by its existence.
Western manufacturers are quickly closing the gap in drone technology without Ukraine
Zelensky recently returned from a tour of Saudi Arabia, Qatar, and the UAE with signed 10-year framework defense cooperation agreements. These countries urgently needed protection from Iranian Shaheds via Ukrainian interceptors.
"Billions, not millions, for our exporters. Everyone will earn, Ukraine will earn," the president declared.
Ukraine and Qatar have agreed on a partnership for at least 10 years / Source: https://www.facebook.com/rustemumerov.ua
The tour was a diplomatic success for Zelensky, and framework agreements were signed — but real contracts are still to come. Meanwhile, as Kyiv negotiates the future, Berlin is acting now. The Bundestag's budget committee is set to approve next week a framework agreement with Rheinmetall worth €2.4 billion — for the procurement of combat drones. Notably, Rheinmetall's drones initially failed testing and received the order only on their second attempt, with delivery expected around 2029.
Rheinmetall and Boeing Australia have entered into a strategic partnership agreement to offer Germany the MQ-28 Ghost Bat aircraft as a mature solution for the Bundeswehr's Joint Combat Aircraft (CCA) procurement by 2029.
There is another example: Airbus announced the successful first test of its reusable Bird of Prey interceptor drone. The system autonomously detected, classified, and notionally destroyed a kamikaze drone using a Mark I micromissile from Estonian company Frankenburg Technologies. From project launch to first flight, nine months elapsed.
Airbus's interceptor drone will be reusable and carry up to 4 Mark1 missiles
The system was developed as a low-cost response to mass threats — precisely the type of weapon in which Ukraine has the greatest combat experience and the most advanced technologies. And it is precisely this market to which Kyiv was unable to open the export door for years.
By 2027 it will be too late to enter the global drone market
Serhiy Prytula, reacting to the news of the Rheinmetall contract, stated: "This could have been 'our' contract. For Ukrainian companies. If the export permit announced a few months ago had been not just a statement of intent, but actual action." Prytula listed why opening exports is beneficial for everyone:
- additional revenue for the economy,
- scaling of production,
- jobs,
- integration into NATO armies,
- geopolitics, additional resources for the front.
NAUDI Executive Director Serhiy Goncharov also stressed that time is running out: "Ukraine's defense industry has something to offer Europeans — products that are and can be competitive there. The main question is how not to waste time with our typical search for a uniquely Ukrainian path."
Goncharov called on the state to stop "improving" exports and let the system work. "The main risk is an insatiable desire to improve something — to introduce additional fees, to restrict, to add more paperwork. When we stop and cease improving everything in pursuit of perfection — everything will work just fine," he noted.
The Technological Forces of Ukraine also called on the government to accelerate the introduction of unified and transparent export mechanisms for the industry: "Today there is a high risk of 'missing the moment,' because the international market is not waiting. While we move cautiously, manufacturers from other countries are already building alliances and beginning cooperation. Whereas cooperation with allied countries through exports would strengthen Ukraine's position as a serious security contributor and a reliable partner."
Arms exports will fill the state budget with new tax revenues, create thousands of new jobs, and allow for the expansion of production capacity — and therefore increase supplies to the army. For manufacturers themselves, it is a chance to finally obtain the financial foundation for scaling and investment in new developments.
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