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Israel Launches 10-Year, 350 Billion-Shekel Push to Build Independent Defense Industry

The move follows wartime export restrictions by allies, seeking to insulate Israeli procurement from future cutoffs.

Overview

  • Prime Minister Benjamin Netanyahu announced the program at an air force ceremony, casting self-reliance as a national security priority.
  • Israel projects defense will account for roughly 16% of the 2026 state budget, estimated at about €30–35 billion.
  • U.S. support in 2025 totaled $3.3 billion in military aid plus $500 million for missile-defense cooperation, according to Congress.
  • Several countries, including Germany, temporarily halted or limited arms sales to Israel during the Gaza war, prompting supply concerns.
  • Israel and Germany signed a contract last week to expand the Arrow 3 missile-defense system, valued by Israel at about €5.7 billion including the base procurement.