The year 2025 is shaping up to be a decisive period for UK defence suppliers. Global defence spending continues to rise, driven by shifting geopolitics, regional security concerns, and rapid advances in military technology. In 2023, worldwide defence expenditure reached $2.44 trillion, with UK defence exporters accounting for around 19% of the global market. This positions Britain as one of the world’s most competitive defence suppliers — but competition is intensifying. Innovation is now essential for maintaining the UK’s competitive advantage, as advanced technologies like robotics and artificial intelligence transform the defence sector. Looking to the future, technological advancements and strategic outlooks will continue to shape the defence sector and impact UK defence suppliers. The UK’s industrial strategy is closely aligned with export growth, supporting the development of cutting-edge capabilities and international partnerships.
For UK companies, identifying the right export markets will be crucial. From longstanding allies with multi-billion procurement budgets to fast-growing regions modernising their forces, and with the UK’s armed forces driving demand and shaping export opportunities, 2025 presents both opportunities and challenges. This guide explores the top five export markets for UK defence suppliers, why they matter, and how businesses can win contracts abroad with the support of Defence Contracts International (DCI).
USA: The World’s Largest Defence Market
The United States remains the single biggest market for UK defence exports. With a proposed FY2025 defence budget of around $850 billion, the US continues to prioritise advanced aerospace, space, cyber, and AI-driven systems. Government contracts and international acquisition processes play a crucial role in facilitating UK–US defence trade, providing opportunities for collaboration and technology transfer. For UK suppliers, the rewards are enormous — but so is the competition. Investment in R&D and technology is essential for success in the US market.
Why It Matters
- UK–US Defence Partnership: The US is consistently a top buyer of UK defence exports, accounting for 13.6% of UK arms export value between 2019–2023.
- AUKUS Export Reforms: Recent changes, including ITAR exemptions for UK suppliers, are reducing barriers and making it easier to collaborate on sensitive projects.
- Industrial Integration: British firms like BAE Systems and Rolls-Royce are already deeply embedded in US programmes, from the F-35 Lightning II fighter to naval and space systems.
Opportunities for UK Suppliers
- AI, cyber security, and counter-drone technologies.
- Hypersonics and space systems.
- Defence R&D collaboration under the National Technology Industrial Base framework.
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NATO Allies in Eastern Europe: Poland and Romania
Eastern Europe has become one of the fastest-growing defence markets, driven by heightened security concerns following Russia’s invasion of Ukraine. NATO allies like Poland and Romania are investing heavily in modernisation, creating opportunities for UK exporters. A resilient supply chain is crucial for meeting the needs of these Eastern European markets, ensuring timely delivery and minimizing risks related to disruptions and cost increases.
Collaborative responses between UK suppliers, local governments, and trade associations play a key role in addressing regional security challenges and supporting procurement and interoperability efforts. Smaller suppliers are increasingly involved in joint projects and partnerships in the region, contributing to innovation and strengthening the overall defence supply network.
Why It Matters
- Poland: Defence spend is set at 4% of GDP — one of the highest in NATO. The UK recently secured a £4 billion deal to supply CAMM-ER missiles under Poland’s NAREW air defence programme.
- Romania: Its 2025 budget allocates €2.75 billion for new equipment, spanning armour, cyber, and naval systems.
- NATO Alignment: Interoperability requirements mean UK suppliers hold a natural advantage over non-NATO competitors.
Opportunities for UK Suppliers
- Air and missile defence systems.
- Armoured vehicles and artillery.
- Secure communications and cyber defence.
Middle East: Saudi Arabia and UAE
The Gulf region remains one of the most lucrative markets globally. With Saudi Arabia budgeting $75.8 billion for defence in 2023 and the UAE investing heavily in next-generation aircraft, naval systems, and cyber, the Middle East offers vast opportunities. The region’s demand for advanced weapons and defence and security equipment continues to grow, driving significant investment and collaboration.
UK companies are not only focused on manufacturing but are also involved in a range of activities such as training, intelligence, and cybersecurity services to support regional security and the development of local capabilities.
Why It Matters
- Scale of Spend: Saudi Arabia and UAE consistently rank among the world’s largest defence spenders.
- Localisation Policies: Initiatives like Saudi Vision 2030 and UAE’s Tawazun programme require foreign suppliers to contribute to domestic industry development.
- UK Track Record: British firms have a strong presence, from Typhoon aircraft sales to naval support programmes.
Opportunities for UK Suppliers
- Joint ventures and offset arrangements.
- Training and through-life support services.
- Emerging domains such as cyber, AI, and space.
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Asia-Pacific: India and Southeast Asia
The Asia-Pacific is undergoing a wave of modernisation, with India and ASEAN states like Indonesia, Vietnam, and the Philippines ramping up procurement. UK defence groups and companies play a crucial role in supporting large-scale construction and technology projects in the region, including the development and assembly of complex facilities.
Technology transfer and partnerships are increasingly important, with science and technical expertise being vital for developing advanced defence solutions tailored to Asia-Pacific markets.
Why It Matters
- India: With a defence budget exceeding $70 billion annually, India is prioritising indigenous production under “Make in India.” This creates opportunities for UK suppliers willing to co-develop and transfer technology.
- ASEAN States: Regional tensions are driving investments in maritime security, radars, and ground forces.
- UK Engagement: The UK’s 2030 Roadmap with India includes advanced tech cooperation, such as Rolls-Royce proposals to co-develop jet engines.
Opportunities for UK Suppliers
- Naval shipbuilding, radar, and missile systems.
- Training and simulator technologies.
- Joint ventures for localisation and long-term sustainment.
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Africa: Egypt and South Africa
While Africa’s overall spend is lower than other regions, certain markets are on the rise. Egypt and South Africa stand out as priority markets in 2025. Mid-tier suppliers play a crucial role in these markets, taking on significant responsibilities in supporting African defence modernization efforts.
Collaboration between members of both UK and African defence industries is essential, particularly in the areas of training and skills development for military personnel. This partnership helps ensure that military personnel are equipped with the necessary skills to meet evolving security challenges.
Why It Matters
- Egypt: Recently licensed £79.3 million in UK radar systems — its largest-ever UK deal. With Gulf backing and US aid, Egypt is modernising across air, land, and naval domains.
- South Africa: Despite budget constraints, it retains a strong defence industry and acts as a gateway to wider African markets. UK firms already provide long-term support for platforms like the Hawk Mk120 trainer jets.
- Strategic Partnerships: Both countries are strengthening ties with the UK through training, technology sharing, and industrial partnerships.
Opportunities for UK Suppliers
- Counter-terrorism and border security equipment.
- Upgrades and sustainment of existing platforms.
- Joint ventures with African defence firms to meet local industrial objectives.
How UK Suppliers Can Win in These Markets
Success abroad requires more than high-quality products. To secure contracts, UK defence suppliers should adopt a multi-layered strategy that blends intelligence, compliance, and practical engagement — supported by real-world examples of success.
- Leverage Intelligence: Use DCI’s tender alerts, export reports, and market analysis tools to track opportunities early. Intelligence and market reports can be easily accessed through DCI’s online platform. For instance, UK firms have identified major radar procurements in Egypt through timely intelligence, positioning them to bid successfully.
- Build Local Partnerships: Form joint ventures or offset agreements to meet localisation requirements. The £4 billion MBDA–PGZ partnership in Poland’s NAREW programme illustrates how co-production with local industry can secure flagship contracts. Suppliers can also join relevant forums or groups, such as the DSF-ISF, to enhance their market presence and collaborate on strategic topics.
- Ensure Compliance: Navigate export controls, offset rules, and procurement standards with expert guidance. Recent ITAR exemptions under the AUKUS framework have eased trade with the US, but compliance remains critical to accessing high-value programmes. The MOD is actively involved in developing collaborative responses to new and emergent issues, ensuring suppliers are prepared for emergent issues in global markets.
- Engage Globally: Attend major defence expos such as DSEI, IDEX, and regional air shows to meet decision-makers. UK suppliers have regularly used these platforms to open dialogues that later translated into multi-year contracts, particularly in the Middle East.
- Offer Full Solutions: Provide not just equipment, but training, sustainment, and technology transfer. BAE Systems’ long-term training and maintenance packages for Typhoon aircraft in Saudi Arabia highlight the value of through-life support in winning enduring business.
DSF Main acts as a key enabler for industry-government collaboration and strategic discussions, helping to address new and emergent issues and achieve shared objectives. Teams within both industry and government play a crucial role in addressing strategic topics and achieving success in international markets.
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Supporting Tools and Resources
DCI offers a full suite of resources for UK exporters:
- UK Defence Export Reports — country-by-country insights.
- Tender Alerts & RFP Database — never miss an opportunity.
- Market Analysis Tools — intelligence for strategic planning.
- Supplier Directory — access full contact details, including website and email addresses, to easily connect with industry partners.
Takeaways
In 2025, the USA, Eastern Europe, the Middle East, Asia-Pacific, and Africa all stand out as priority markets for UK defence suppliers. Each presents unique challenges, from regulatory hurdles to offset obligations, but they also offer vast opportunities for those who prepare strategically. Many UK defence suppliers are trading below their true value in the global market, making them attractive for long-term investment. Interest in UK defence suppliers is also growing among international investors.
By combining the UK’s reputation for reliable, high-quality defence solutions with intelligence-led support from DCI, suppliers can confidently navigate these markets, secure contracts, and grow their international footprint. The increasingly important role of cybersecurity and related services further enhances the relevance of UK defence companies in addressing modern security needs.
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