This is a best prospect sector industry for this country. Includes a market overview and trade data.
Last Published: 4/23/2018


The United Arab Emirates (U.A.E.) ranks among the top 15 defense spenders in the world according to Business Monitor International (BMI).  Defense expenditure as a proportion of GDP has remained comparatively high in recent years in response to rising Islamist extremism in the region, persistent tensions with Iran, and the U.A.E.’s participation in the Saudi-led coalition’s military efforts in Yemen.  While the U.A.E. government has continued to procure high-priority defense articles and services, it has focused recent purchases on urgent operational requirements in support of Yemen operations, and has delayed procurement of other lower-priority defense items in 2016. 

According to BMI and, the U.A.E.’s 2016 defense expenditures stood at approximately $23.4.  GlobalSecurity reported that the U.A.E. registered a compounded annual growth rate (CAGR) of 4.5 percent during 2016, and projects the country’s defense expenditure will grow at a CAGR of 6.5 percent to value $31.8 billion by 2021. On a cumulative basis, the country is expected to invest $140.8 billion for defense purposes, of which $53.1 billion is earmarked for capital expenditure to fund defense procurements.

Key Stakeholders

In December of 2014, the U.A.E. government combined several defense and aerospace companies owned by Mubadala Development, Tawazun Holding, and Emirates Advanced Investment Group (EAIG) into a single entity, Emirates Defense Industries Company (EDIC). EDIC’s role is to drive the U.A.E.'s defense industry by providing manufacturing, training, mapping, logistics, technology development and communications as well as maintenance, repair and operations services for air, land and sea platforms.

According to the Lexington Institute’s Dr. Theodore Karasik and Adam Dempsey, at the 2017 International Defence Exhibition and Conference (IDEX), the U.A.E. signed 82 contracts worth an estimated $5 billion. A large number were awarded to domestic manufacturers in the U.A.E., where the indigenous defense industry is growing.  Although “buying local” is hardly unique to the U.A.E., prioritizing domestic manufacturers nevertheless provides some interesting insights into the current state and possible trajectory of its defense industry.

By investing in the U.A.E.’s indigenous defense sector, Abu Dhabi seeks to advance the country’s interests while creating lucrative commercial opportunities outside of the oil and gas sectors for U.A.E. nationals. To create a “competitive knowledge economy” the U.A.E. has invested in major initiatives such as the National Innovation Strategy, U.A.E. Vision 2021, and Abu Dhabi Vision 2030.

The establishment of the EDIC in 2014 was a milestone in the U.A.E.’s efforts to “localize” its defense expenditures, a pillar of the country’s economic diversification agenda. EDIC came out of the integration and consolidation of defense industry companies previously under the umbrellas of Mubadala Development Company, Tawazun Holding, and EAIG.

Offset Program

The Tawazun Economic Program, which is overseen by the Tawazun Economic Council, is the U.A.E.’s industrial participation program that seeks to derive economic value from the country’s extensive defense procurement program.  The key objectives of the program include: build critical national defense sectors, create a knowledge-based economy, diversify the U.A.E. economy by growing the country’s industrial base, create business opportunities for the U.A.E. private sector, generate high-value exports, and produce employment opportunities for U.A.E. nationals in high-tech fields.

A foreign defense supplier to the U.A.E. with over $10 million in contract value over a five year period must participate in this program. The foreign contractor generates obligations as a result of sale of goods and services to U.A.E.  The program has established formal guidelines that outline the focus areas, mechanics, and process to fulfil these obligations. Learn more  on their website.

Foreign Military Sales (FMS) and Direct Commercial Sales (DCS)

The U.A.E. is America’s second largest customer under the FMS program.  In 2015, the U.S. had over 80 FMS cases with the U.A.E., valued at over $20 billion, making the U.A.E. FMS program one of the largest in the Middle East and globally.  Many sales of defense articles and services contain both large DCS and FMS components.  Integrating those two approaches into a coherent solution for the customer can prove challenging without close cooperation between U.S. industry and the U.S. government.

On May 8, 2017, the U.S. signed a new, updated defense accord with the U.A.E. that could allow the U.S. to send more troops and equipment to the U.A.E.   According to the Pentagon, the agreement replaces a 1994 accord to better reflect the broad range of military-to-military cooperation that the UAE and U.S. enjoy today.  There are currently 5,000 U.S. military personnel are stationed at U.A.E. military facilities.

Leading Sub-Sectors

The U.A.E. is a net importer of military assets, and the country is open to all suppliers; however, the government is working to reduce its dependence on defense imports through the development of its own defense manufacturing capability. The U.A.E. Air Force and Air Defense traditionally receive the lion’s share of the U.A.E.’s total defense procurement dollars, followed by the Joint Aviation Command, Land Forces, the Presidential Guard, and the Navy. The U.A.E.’s procurement priorities include missile defense; precision fires; intelligence, surveillance and reconnaissance (ISR); command and control, expeditionary logistics; and maintenance, repair, and overhaul. The U.A.E. GHQ Critical Infrastructure & Coastal Protection Authority (CICPA) is also expanding rapidly and is tasked with protecting key infrastructure such as water desalinization plants, oil and gas platforms, pipelines, and the Barakah nuclear site.


To support Abu Dhabi’s emirate-wide strategic framework plan – Abu Dhabi Vision 2030 – the Abu Dhabi government is focused on importing knowledge  to strengthen the  Advanced Military Maintenance, Repair, and Overhaul Center (AMMROC).  AMMROC is a joint venture between Mubadala, a strategic investment arm of the Abu Dhabi government, and the U.S. firms Sikorsky Aerospace  Services  and  Lockheed  Martin. AMMROC aims to provide innovative platform solutions for all fixed and rotary-wing aircraft operated by the U.A.E. Armed Forces and other customers in the region.

Over the last few years, the U.A.E. has forged a number of partnerships to develop its local capabilities:
Recently, Tawazun announced the establishment of another two business lines: Advanced Pyrotechnics, which will be focusing on the manufacturing of non-lethal ammunitions; and Al Hosn Armored Systems, which will produce protective personal gear.

Lockheed Martin partnered with Sweden-based Exechon and Abu Dhabi-based Injaz National to establish a machining center in the U.A.E.

Canadian WESCAM announced a partnership with ADASI to open a center in Abu Dhabi for the maintenance and repair of its imaging and targeting systems.

U.S.-based Orbital ATK  formed a new subsidiary in the U.A.E. with Al Tuff.

Indian Reliance Defense Limited reportedly signed a cooperation memorandum of understanding with EDIC.
The U.A.E. Armed Forces currently outsources a number of non-core military service activities, such as aircraft and equipment maintenance and military training to U.A.E. and non-U.A.E.-based private and government contractors.  This arrangement underlines the U.A.E. Armed Forces’ focus on professionalizing its “core” units to ensure they are well adapted and able to face and counter any threat.

Defense tenders in the U.A.E. tend to be non-transparent and clarifying information is often difficult to ascertain. Procurement requirements may be withheld or changed with minimal or no notice. 

Trade Shows & Exhibitions

Dubai Airshow
November 12 – 16, 2017
Dubai, U.A.E.
Venue: DWC, Dubai Airshow Site

International Defence Exhibition and Conference (IDEX)
February 2019
(Check with the Association of the U.S. Army for updates)
Abu Dhabi, UAE
Venue: Abu Dhabi National Exhibition Center

Web Resources

Emirates Defense Industries Companies
Tawazun Holding
Advanced Military Maintinence Repair Overhaul Center
International Defence Exhibition & Conference
Dubai Airshow
Critical Infrastrucutre & Coastal Protection Authority

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United Arab Emirates Defense Equipment Trade Development and Promotion