The Ukrainian government has announced a new mechanism for exporting weapons, responding to its ongoing military needs during wartime. This initiative, dubbed the Drone Deal, enables local manufacturers to sell military products overseas, provided they can fulfill domestic orders for the Ukrainian Armed Forces simultaneously.
As explained by Prime Minister Denys Shmyhal, the Ministry of Defense retains the right to deny export permits if there are plans to procure these items for Ukraine’s defense or if the goods are classified as critical. Under this new framework, 20% of revenues from exports of finished products and technologies, and 30% from components, will be allocated to a special fund to bolster Ukraine’s defense industry. Contracts for finished goods will require a minimum value of 15 million UAH, while components will not face similar limits.
This mechanism is expected to empower Ukrainian manufacturers to scale up their operations and enhance state funding for defense through increased budget revenues. However, Shmyhal emphasized that the needs of the Armed Forces will remain the top priority.
He clarified that only surplus weapons, after fully satisfying military requirements, will be eligible for export. Currently, more than half of the armaments used on the front lines are produced in Ukraine. The country is also ramping up production of drones, electronic warfare systems, ammunition, and other defense technologies.
Background
- In response to the full-scale invasion by Russia in 2022, Ukraine imposed a ban on military exports to ensure sufficient resources for its armed forces.
- As of 2024, the Ministry of Defense has not ruled out lifting this ban, which, as reported by Financial Times, could potentially expand domestic drone production and generate up to $20 billion in revenue from international drone sales.
- In June 2025, President Volodymyr Zelensky announced the Build with Ukraine program, aimed at transferring technologies for drone, missile, and possibly artillery production abroad, with manufacturing planned in nations supporting Ukraine and financing its defense sector.
- Ukraine continues to increase its arms production; in March 2024, the then-Minister of Digital Transformation, Mykhailo Fedorov, reported that over 90% of drones used in combat were produced in Ukraine, and Zelensky noted that there are 200 strong defense companies in the country, with 30 ranking among the world’s best.
- On April 28, 2026, Zelensky officially announced the launch of weapon exports.
