The defense sector’s evolving import-export strategy

The war has made the UAE's defense industry look like a self-reliance story. Iranian drone and missile attacks have put the cost of air defense front and center, and a string of new manufacturing agreements has run through state defense group Edge. But Edge mostly sells abroad: exports make up 76% of its sales, and international orders account for USD 21 bn of its backlog. Meanwhile, the UAE still imports much of its most advanced hardware.

These trends aren't pulling in opposite directions: Exports and stakes in foreign firms give Edge the scale and technology access to build more at home, while imports fill the gaps it can't yet close, and the war has made those gaps more urgent.

Still a big buyer, but buying less

The UAE remains one of the world's largest arms importers. It was the 11th largest globally in 2021-25, accounting for 2.7% of global arms imports, according to the Stockholm International Peace Research Institute (SIPRI). Regionally, it ranked fourth, behind Saudi Arabia, Qatar and Kuwait.

But it's buying less than it used to. The UAE's arms imports fell 15% in 2021-25 compared with 2016-20, according to SIPRI, which measures the volume of deliveries rather than their dollar value. That extends a longer decline: the UAE was once the world's third-largest arms importer. It also dropped from the third- to the ninth-largest recipient of US arms between 2017 and 2021. Overall, it has seen a 40% reduction in arms imports in the ten years preceding 2025. None of this data yet covers the period since the war began.

There’s an important resilience angle at play: “The bigger change is that the UAE now buys and builds across a much wider range of capabilities than before,” EY Defence and Security Director Malcolm Lyne told us. “That reduces reliance on any single supplier or nation, and makes the country more resilient.”

What it buys, and from whom

Missiles made up the largest share of imports in 2021-25, followed by aircraft and air defense systems. The US supplied 42% of the UAE's arms imports over the period, followed by France at 18% and South Korea at 10%. According to SIPRI analyst Zain Hussein, the UAE relies particularly on the US for combat helicopters and on South Korea for surface-to-air missile systems, while France is a key supplier of combat aircraft.

All three relationships are deepening: These top three import sources have signalled that defense cooperation with the Emirates is here to stay. The UAE has inked a USD 35 bn defense pact with South Korea, set up a European headquarters in Paris, and maintained close defense ties with the US for several years now.

The gap the war exposed

Much of what the UAE imports is equipment it can't yet make itself. It can build shorter-range systems such as Edge's SkyKnight, which can intercept cruise missiles at up to 10 km, but for medium- and long-range air defense it still depends on imported systems: the US's Patriot and THAAD, and South Korea's M-SAM.

The war has shifted what it's shopping for. With intercepting missiles and drones now the priority, the emphasis has moved from platforms like combat helicopters to air defense. Most recently, the US approved a possible USD 1.04 bn worth of arms from the US of kits that turn cheap unguided rockets into guided munitions capable of shooting down drones.

Built to localize + sell

Edge was created in 2019 to consolidate and refocus the UAE's defense industry, absorbing entities including Emirates Defence Industries Company (EDIC) and businesses from Tawazun. Its mandate, writes Lucie Béraud-Sudreau of the International Institute for Strategic Studies, was to bring defense technology, especially advanced systems, to market faster.

It has grown into a heavyweight exporter. Edge says its product portfolio grew 550% in its first five years and that it now operates in 91 countries through a network of 25 subsidiaries and a growing list of international JVs. It ranked 22nd on SIPRI's list of the world's top arms-producing companies in 2019, with sales of USD 4.75 bn. The company said the USD 2.3 bn in defense contracts it secured in 2024 was set to at least double in 2025.

Edge’s very existence came from a drive to streamline and refocus its defense sector. When it was established, the firm absorbed several other defense entities, like Tawazun and Emirates Defence Industries Company (EDIC) as part of a reform of its previous strategy centered around EDIC,. With Edge, the focus turned to bringing defense solutions, in the advanced technology in particular, to market faster.

As for its subsidiaries, “the structure lets Edge set up partnerships and JVs quickly without restructuring the wider group, so it can expand faster to capture orders,” Lyne says. Partnerships with foreign players is also easier, as they partner with the subsidiary rather than the whole firm, he tells us.

They’re also profitable in their own right: Even though export revenue is spread across different clusters, the largest contributor is platforms and systems, as they are high-value programs, Lyne tells us. However, “As the newer capability areas grow internationally, revenue should spread more evenly across the group,” he adds.

A loop, not a contradiction

Edge's foreign holdings are already supplying the UAE. Edge owns 52% of Swiss VTOL maker Anavia, which agreed in 2024 to supply 200 unmanned helicopters to the UAE's Defense Ministry. Estonia's Milrem Robotics, 50% owned by Edge, signed a contract that same year to supply 60 unmanned ground vehicles to the ministry. Edge's JVs, including with Italy's Leonardo on advanced sensors, Hungary's 4iG on non-lethal systems, and Spain's EM&E Group on remote weapons systems, target both UAE and international customers.

Even so, as it stands “very little product comes back to the UAE directly,” according to Lyne. Most exports are delivered through local partners and JVs in the customer country, but over time these partnerships could support two-way supply chains, he says.

It’s also about scale. The UAE is trying to build economies of scale in defense manufacturing, writes Béraud-Sudreau. Selling abroad spreads fixed costs over larger production runs, lowers unit costs and frees up money to reinvest, so exports serve the domestic defense base rather than standing alone. Buying into foreign firms helps the same loop: such investments “facilitate technology transfers,” she writes.

“Exports help make localization economically sustainable,” according to Lyne. “Export orders give local production lines the scale to stay viable, keep skilled teams employed and spread fixed costs.”

Where does that leave us?

Edge says 80% of its systems are built in the UAE, but it has also said that expanding its international partnerships is critical to the country's overall defense capabilities. Our read: exports look set to do double duty, expanding Edge's overseas footprint while generating revenue that can help fund the imports needed to fill remaining gaps.

“As older platforms reach end of life, more of their replacements are likely to be produced domestically,” Lyne says. “Newer, niche capabilities such as UAS and interceptors are increasingly developed and produced in the UAE and form a growing part of the export offer.”

There’s a balance to be struck when it comes to the tension between domestic needs and selling abroad, he tells us. That can be managed through prioritization rules, more production capacity, and a more diverse and locally anchored supplier bases, according to Lyne.

In the near term, the priority is the threat on the ground: strengthening the UAE's ability to intercept future missile and drone attacks, and protecting critical infrastructure such as ports, oil and gas facilities and data centers, all of which were targeted during the recent conflict.