On June 4, in his evening address, President Zelenski called weapons exports "connections with the world" and emphasized that sales should become a stable source of budget revenue. Behind this formulation lies a concrete industrial problem: Ukraine is already producing more than its own state can purchase.
The Factory Exists — But There's No Money for Orders
According to the Council of Arms Manufacturers of Ukraine, in 2024 the total production capacity of the defense industry was approximately $20 billion, while actual purchases were only $10 billion, meaning enterprises were operating at roughly half their potential. By 2025, capacity has grown to $35 billion, but state orders again cover no more than half of this volume.
Had manufacturers been allowed to fill this "gap" with foreign contracts back in 2024, Ukraine's Technological Forces (Tech Force UA) calculated that potential foreign currency earnings could have reached $2 billion per year. By 2026, capacity for long-range drone production alone could reach $35 billion — if markets open in time.
The consequences of delay are already visible. According to an October Tech Force UA survey, 51% of defense manufacturers were considering moving production lines abroad — to places where there are buyers and better prices.
Build with Ukraine: Not Sales, But a Joint Factory
On June 21, Zelenski announced the launch of the Build with Ukraine program — a format where Ukraine provides technology while production unfolds at partner countries' facilities.
"We will provide the appropriate technologies and will produce weapons in their countries for us and for them: drones of various types, missiles, and possibly artillery."
President Zelenski, June 21, 2025
The first agreements with European states are planned to be signed in summer 2025. Additionally, partners outside Europe who finance drone or missile production in Ukraine will also be offered the opportunity to open production lines on their territory. In parallel, Kyiv is asking partner states to allocate 0.25% of their GDP annually to support the Ukrainian defense industry and domestic production.
What This Means for the Budget — and Why It's Not So Simple
Chief economist of Dragon Capital Olena Bilan notes that the defense industry has already become one of the key drivers of GDP growth in 2025, but exact data is classified — analysts rely only on indirect indicators. Meanwhile, the state budget deficit, excluding external support, stands at approximately 25% of GDP, while own revenues cover less than 60% of expenditures. Foreign currency revenues from weapons could partially reduce this dependence on external loans.
But the real conflict is not between "selling" or "not selling." It lies between the speed of opening markets and the risk of losing control over technologies. Aviation expert and director of the Institute of Management and Strategy Bohdan Dolinets warned in a comment to Ukrinform that if combat technologies fall into unreliable hands and are used in terrorist acts, Ukraine risks international sanctions and deterioration of relations with partners. The world has strict end-user regulations — and Ukraine is still only building the appropriate control system.
- Potential: by estimates, annual revenues from weapons exports could reach $10 billion and more in the medium term.
- Limiting factor: absence of a transparent end-user verification mechanism.
- Manufacturers' dilemma: half of enterprises are ready to move production lines abroad if the state does not open the market fast enough — and technologies will leave along with the lines.
If agreements under Build with Ukraine are signed in summer, as Zelenski promises, the next test will be different: will Ukraine have a registry of end buyers and a verification mechanism before the first batch of technologies crosses the border — because this is exactly what will determine whether this export becomes a diplomatic asset or a new source of vulnerabilities.
