Ukraine could become the West’s solution for rearmament

Published date: 13th March 2026 | Author: Tom Bailey

The current outbreak of war in the Middle East is a reminder that modern warfare is as much an industrial contest as a military one. The critical question is not only who has the most advanced weapons, but who can produce them and replace them the fastest.

Much analysis of the war points out the outcome hinges on who can sustain their rates of fire for the longest. Stacie Pettyjohn, the director of the defence program at the Center for a New American Security in Washington, said the conflict had become “a salvo competition”.

« There are currently reports that the US and at least one Gulf country are in talks to buy Ukrainian made drone interceptors. »

The US was reported to have used up a full 25% of its THADD interceptor missiles in the 12 day war.

There are regular reports about the strain the conflict is placing on US munitions stockpiles, particularly air-defence interceptors used to counter relatively cheap drones and missiles. Similarly, during the previous 2025 Israel-Iran war (the so-called 12 Day War), the US was reported to have used up a full 25% of its THADD interceptor missiles.

The broader concern for the United States and Europe is that their defence industrial bases are not currently structured for sustained high-intensity conflict. For decades Western militaries optimised procurement around smaller expeditionary wars rather than prolonged industrial-scale warfare. Russia’s full-scale invasion of Ukraine in 2022 exposed the limits of this model, forcing NATO governments to rethink defence production and stockpile levels.

Ukraine, however, may emerge as an unexpected part of the solution, having learned, through necessity, how to scale production under wartime conditions. There are currently reports that the US and at least one Gulf country are in talks to buy Ukrainian made drone interceptors.

Source: Euromaidan Press report; 26/1/2026. Chart displays expected data. For illustrative purposes only.

« Ukraine has also begun developing indigenous long-range strike missiles. »

Ukraine has developed the ability to produce such systems at scale to defend against the waves of drone attacks launched by Russia. Many of the drones used by Russia are derived from Iranian Shahed designs – similar to those currently used by Iran itself.

Ukraine has also rapidly expanded its ability to manufacture drones more broadly. Production has expanded at extraordinary speed. Ukraine produced around 800,000 drones in 2023, rising to more than 2 million in 2024, with output expected to have reached around 4 million annually in 2025. The government has set a target of seven million drones per year by 2026. The domestic drone sector now includes ~500 manufacturers. Ukraine recently opened export centres across Europe to encourage demand for its drone industry. Exporting defence technologies and establishing weapons production lines in partner countries are part of a broader effort to internationalise Ukraine’s arms industry, as its drone production capacity increasingly outpaces available financing.

Ukraine has also rapidly expanded its ability to manufacture drones more broadly.

Beyond drones, Ukraine is rebuilding a broader defence industrial base. Domestic firms now manufacture systems such as the Bohdana 155mm self-propelled howitzer and produce NATO-standard artillery ammunition. Ukraine has also begun developing indigenous long-range strike missiles. One example is the FP-5 “Flamingo” cruise missile, unveiled in 2025, which has a reported range of around 3,000 kilometres and carries a warhead of more than one tonne. It is designed to be far cheaper than Western cruise missiles, reflecting Ukraine’s broader focus on mass-produced long-range strike weapons.

As a result, Ukraine is beginning to shift from being solely a recipient of Western military aid to becoming a potential supplier of equipment and technology to NATO countries themselves.

Western defence companies including Rheinmetall and BAE Systems are establishing production facilities in Ukraine. As of 2025, roughly 25 foreign defence companies were in the process of localising production in Ukraine, according to the Ukrainian government.

Company	Country	Activity in Ukraine
BAE Systems	United Kingdom	Joint production and maintenance of L119 howitzers and broader cooperation on weapons production
Rheinmetall	Germany	Establishing armoured vehicle repair and manufacturing facilities; joint ventures for ammunition and vehicle production
Saab	Sweden	Agreements on joint production of air-defence systems and related technologies
Northrop Grumman	United States	Cooperation on ammunition production and defence technologies
Thales	France	Joint venture with Ukrainian defence industry focused on air defence, radar, electronic warfare and communications

Ukraine is one of the few countries in the world with direct experience of fighting a high-intensity, technologically sophisticated war in the 21st century. In the years ahead NATO members are likely to rely not only on Ukraine’s battlefield experience and technological innovation, but also increasingly on its ability to produce weapons at scale.

Adapting precision warfare: How US defence spending priorities are changing

October 2026

Ukraine could become the West’s solution for rearmament

﻿ « There are currently reports that the US and at least one Gulf country are in talks to buy Ukrainian made drone interceptors. »

﻿ « Ukraine has also begun developing indigenous long-range strike missiles. »

Related Funds

More Articles

Investment Strategies

About Us

Resources

Leaving HANetf's Website

« There are currently reports that the US and at least one Gulf country are in talks to buy Ukrainian made drone interceptors. »

« Ukraine has also begun developing indigenous long-range strike missiles. »