Israel records $12.5 billion in defense exports, led by drones, air defense

JERUSALEM — Israel’s defense exports reached a record high of $12.5 billion in 2022, according to the Israeli Ministry of Defense, led by keen global interest in drones and air defense systems.

An MoD report released today also noted continued growth in a new, big market for Israeli tech: Abraham Accords countries in the Gulf that bought approximately $3 billion-worth of defense platforms. This means that since the peace deals were signed in 2020, sales to countries that Israel has new ties with are now almost as high as all of Israel’s $3.6 billion in sales back in 2005.

Overall “Israeli defense exports have doubled in less than a decade and increased by fifty percent in three years,” the Ministry said. Israel has been a leader in drone exports for decades, owing to the fact the country was a pioneer in UAVs in the 1980s and also a leading developer of loitering munitions.

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Even with competition from China, Turkey and other drone manufacturers, the Israeli report says around one quarter of the agreements signed in 2022 were for UAVs and drones. Israel’s three large defense companies — Elbit Systems, Rafael Advanced Defense Systems and Israel Aerospace Industries — all play a role in the UAV and counter-UAV market. Elbit makes the large Hermes 900 drone, and IAI sells the Heron line of drones. Rafael is a part owner of Aeronautics with makes the Orbiter line.

“The remarkable data unveiled by the Israeli defense establishment, reaching new heights in defense exports, showcases the State of Israel’s strength and excellent technological capabilities. Through the creativity and innovation of both the Israeli defense establishment and the Ministry of Defense, we not only outpace our adversaries but also sustain our qualitative edge,” said Minister of Defense, Yoav Gallant.

Israel has approximately 120 defense companies, including many smaller companies that focus on unique technologies, such as radars, or sights for rifles and C-UAS systems. Israel’s defense sales are led in some cases by government-to-government deals, such as the May deal between Israeli and Dutch ministries of defense for $305 million-worth of Elbit-made PULS Rocket Artillery Systems.

While UAVs were a quarter of the exports, the ministry said missiles, rockets, and air defense systems were a fifth of the sales and the remainder included “radar and EW (13 [percent]), manned aircrafts and avionics (5 [percent]), observation and optronics (10 [percent]), weapon stations and launchers (5 [percent]), vehicles and APCs (5 [percent]), C4I and communication systems (6 [percent]), intelligence, information and cyber systems (6 [percent]), ammunition and armament (4 [percent]), maritime systems (1 [percent]), services and other (1 [percent]).” Historically Israel does not make or export large platforms such as airplanes, or large ships or submarines. And while it does make tanks and armored personnel carriers, it doesn’t generally export them.  Major sales, therefore, tend to come from air defense technology, such as Rafael’s Iron Dome and David’s Sling and IAI’s Arrow systems, as well as IAI’s Barak system.

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Exports were concentrated in Asia and the Pacific, around thirty percent, and Europe, also around thirty percent. North America accounted for eleven percent while Africa and Latin America were only three percent each respectively. Sales have increased in Asia, including in places like India, in the last decades; as well as in Europe, especially in the wake of the Ukraine war. “The rate of export agreements between countries (GTG), signed by the Ministry of Defense has reached an all-time high, over $4 billion compared to $412 million in 2018. This constitutes a 10-fold increase in 5 years,” the Ministry said. Abraham Accords countries, including the UAE, Morocco and Bahrain, counted for $3 billion worth of exports and 24 percent of all sales.

“Global instability increases the demand for Israeli air defense systems, drones, UAVs, and missiles, and we continually work to preserve our capabilities and strengthen them,” said Director General of the Israel Ministry of Defense, Maj. Gen. Eyal Zamir.

Israel’s International Defense Cooperation Directorate (SIBAT) Director Brig. Gen. Yair Kulas added that “this success is primarily thanks to the technology developed by Israeli defense industries. Demand for Israeli defense solutions has grown in the past year, manifesting in the sharp increase in agreements between defense ministries (GTG). Looking ahead, the geostrategic changes in Europe and Asia in addition to the Abraham Accords generate a high demand for Israel’s cutting-edge systems. The Ministry of Defense is actively collaborating with Israeli defense industries to continually increase the scope of defense exports.”

Back in 2010 exports were $7 billion. While the exports had crept up slowly over the years, there was a spike in 2021, and now they have reached another record. According to data from the Stockholm International Peace Research Institute (SIPRI), Israel was the world’s tenth largest exporters between 2018 and 2022. It had 2.3 percent of the global share of exports from 2018-2022. That report also said Israeli exports had decreased in the 2018 and 2022 timespan compared to previous years, however as the current data shows, this is likely no longer the case.