Private arms manufacturers in Ukraine need the ability to export their products. Export restrictions are leading to the relocation of this sector, which in turn reduces the share of defense tech in the overall IT export volume and negatively impacts Ukraine’s export potential. This was stated by Kateryna Mykhalko, Executive Director of the Technological Forces of Ukraine (TSU).
This is reported by Finway
Situation in the Defense Technology Market
According to her, 85% of the surveyed arms manufacturers of TSU have already relocated or plan to do so. Just last year, the volume of unused export potential amounted to $2 billion. This pertains to weapons and military equipment that TSU member companies could have produced but were not contracted by the state.
Economic Impact on the Country
Mykhalko emphasized that if these foreign currency revenues had entered the state budget, it would have had a positive impact on Ukraine’s economic capacity. Defense companies would have received more resources for their development.
President Volodymyr Zelensky also highlighted that Ukrainian production capacities in the defense sector are only utilized at 60% due to a lack of funding. While Ukraine has managed to significantly increase funding (previously it accounted for only 10%), additional funding to cover 100% of the defense industry’s capabilities would positively affect Ukraine’s defense capability.