AGP Executive Report

Allied Modernization: The Philippines says the U.S. will increase funding for its military modernization, while Japan is fast-tracking the transfer of a decommissioned warship. Australia is also considering Iron Dome interceptors for a planned air-defense shield. UK Industrial Policy: From April 2027, selected overseas defense contracts worth at least £50 million will require suppliers to deliver equivalent value in UK jobs, facilities, skills or investment. Major Orders: Finland approved an €84.5 million purchase of German RGW110 anti-tank weapons; Lockheed Martin won a $694 million Air Force hypersonic-missile contract, and India cleared proposals for eight next-generation corvettes worth about $4.8 billion. Production and Readiness: L3Harris is expanding solid-rocket-motor production, while Canada’s auditor general warned that ammunition stockpiles have critical gaps and procurement has been slow. Budget Pressure: The Pentagon is reportedly planning around a $1.1 trillion budget—$400 billion below the administration’s request—raising questions about which programs could be prioritized. Supply Chain Evasion: A Reuters investigation found that more than 5,000 linked entities helped Iran import at least $2 billion in military hardware since 2025, using overseas intermediaries and oil revenues.

Missile Production: European startup Destinus says it now produces nearly 300 Ruta cruise missiles monthly—more than Europe’s prewar annual output—and has built over 1,750. Undersea Systems: Kongsberg won a $54 million U.S. contract for autonomous underwater vehicles and related capabilities. Factory Investment: Foundry Robotics raised $100 million to expand an autonomous manufacturing facility serving defense and other industries. Procurement and Industry: India cleared military acquisition proposals worth about ₹2.12 lakh crore, with 82% to be sourced domestically; Lockheed Martin also secured $694 million to expand Alabama manufacturing. Spending Plans: The UK pledged to raise defense spending to 3% of GDP by 2030 and pursue new investment partnerships with industry. Supply Networks: A Reuters investigation found Iran used a network of more than 5,000 agencies to import military-related goods despite sanctions, with one agency recording $2.3 billion in imports over 18 months. Air Defense: Australia is weighing Iron Dome’s Tamir interceptor alongside Patriot and other options for a future ground-based missile shield.

Major Contracts: The U.S. Air Force awarded Lockheed Martin $694 million to produce ARRW hypersonic missiles; Fluor won a $2.4 billion naval nuclear-propulsion contract, and Digital Force Technologies secured a $500 million counter-drone contract. Industrial Expansion: Hanwha Defense USA is taking control of Philly Shipyard as it pursues defense work. Nigeria says it will begin large-scale local military production within a year, while India approved roughly $25 billion in procurement proposals, with 82% sourced domestically. Allied Partnerships: South Korea and Germany plan to deepen defense-industry ties, while the Netherlands and Ukraine have launched the joint Bliksem air-defense project. Policy and Oversight: The UK pledged to raise defense spending to 3% of GDP by 2030. Separately, a former U.S. Army official pleaded guilty in a Hawaii contracting bribery scheme involving more than $3 million in payments to a contractor.

Strategic Procurement: India approved ₹2.12 lakh crore in military acquisition proposals, with 82% of sourcing set to remain domestic. AI and Autonomy: A nearly $2 million DARPA award will fund testing methods for military autonomous systems, while India’s Sarvam AI signed a five-year deal to develop AI for all three services. Industrial Capacity: The U.S. Department of War awarded Biosphere $21 million to develop large-scale biomanufacturing for critical materials. Company Performance: Turkish defense giant Aselsan reported a $30.7 billion backlog and $14 billion in new contracts during the first nine months of 2026. Supply Chain Controls: Malaysian customs seized 30 servers carrying advanced AI chips worth nearly RM49.5 million; authorities said the chips could have military applications and were subject to export controls. Allied Industry: Finland and Japan signed a defense equipment and technology transfer agreement, opening the door to joint research, development and production. UK Investment: Britain set a target to spend 3% of GDP on defense by 2030 and outlined plans to mobilize private capital and up to £5 billion in public lending for defense and dual-use industries.

Industrial Expansion: HD Construction Equipment opened a new Gunsan engine plant in South Korea, with capacity for tank engines and large power-generation engines as it targets $1.7 billion in engine sales by 2030. Shipbuilding: Hanwha Defense USA will take control of Hanwha Philly Shipyard, aligning its U.S. defense and commercial shipbuilding operations as it pursues Navy work. Procurement: India cleared ₹2.12 lakh crore in military acquisition proposals, with drones and other locally produced systems among the priorities. Missile Production: The U.S. Air Force revived its AGM-183A hypersonic missile program with a $694 million Lockheed Martin production contract. Maritime Security: SAFE Boats won a five-year agreement worth up to $36.4 million to supply patrol boats, training and support for U.S. Southern Command partner nations.

Space Security: Integrity ISR and Myongji University agreed to explore training for South Korea’s space-security workforce, including in cybersecurity and surveillance. India’s Procurement Push: New approvals worth ₹2.12 lakh crore prioritize drones, helicopters and artillery, with 82% of sourcing earmarked for domestic industry. Big Defense Orders: Saab reported a $6.6 billion order haul for European fighter and naval capabilities, while ST Engineering booked $5.6 billion in third-quarter contracts. U.S. Programs: The Air Force awarded Lockheed Martin a $694 million contract for AGM-183A hypersonic missile production; Anduril and Qualcomm also unveiled plans for a U.S.-made government and defense laptop. Counter-Drone Production: Canada’s 49North and Ukraine’s UNWAVE plan to pursue joint production and support of counter-drone systems. Industry Capacity: UK businesses warn unclear procurement timelines could send increased defense spending to overseas suppliers.

Australia’s Capability Push: New legislation would let Defence, industry and trusted partners develop and test capabilities faster, supporting AUKUS and counter-drone protection at bases. Australian spacecraft-power startup MP Space also raised A$23 million to expand manufacturing. India’s Procurement Drive: The Defence Acquisition Council cleared proposals worth ₹2.12 lakh crore, with 82% of sourcing planned from Indian industry and drones, helicopters and air-defence systems among the priorities. U.S. Weapons Production: The Air Force awarded Lockheed Martin a $694 million contract for ARRW hypersonic missiles, reviving a program once slated for cancellation. Air-Defence Demand: Germany’s Helsing unveiled its Contra interceptor system as France ordered four more SAMP/T NG units; L3Harris also won a $60 million Army counter-drone contract. Industry Capacity: Lockheed Martin completed its $3.5 billion acquisition of Ultra Maritime, while General Atomics selected Spirit Defense to build fuselage components for its FQ-42 combat aircraft. Procurement Watch: UK firms warn that unclear contracts and slow processes could blunt the benefit of higher defence spending and push investment overseas.

India’s Procurement Push: New Delhi approved ₹2.12 lakh crore in defence acquisitions, with about 82% earmarked for Indian industry. Plans include artillery, air defences, drones and 200 light helicopters for the Army and Air Force. Malaysia’s Fighter Delivery: Malaysia expects its first two South Korean-made FA-50M aircraft on October 30, part of an 18-plane, nearly RM4 billion deal. Air Defence Innovation: Germany’s Helsing unveiled Contra, an AI-coordinated system designed to counter mass drone and missile attacks, alongside two new interceptors. Cyber Defence: The US Army selected AWS and World Wide Technology for a $2.6 million pilot to develop autonomous tools for detecting and disrupting cyber threats. Export Contracts: Elbit Systems secured about $200 million in Asia-Pacific contracts for airborne intelligence, surveillance and reconnaissance systems and training solutions.

Shipbuilding: South Korea’s Hanwha Ocean is emerging as a key partner in the US shipbuilding revival, investing in Philadelphia’s shipyard and pursuing US Navy work as Washington looks to expand capacity. Korean Defense Industry: South Korea’s DAPA is seeking to revoke LIG Defense & Aerospace’s contractor status after bribery and procurement-related indictments, a major setback for the company’s export prospects. Arms Exports: India says it is now Europe’s third-largest arms supplier, with rising demand for ammunition helping lift exports to a record ₹38,424 crore. Industry Partnerships: India and Poland are deepening defense cooperation, including plans for co-development and production; Ukraine has also joined a NATO procurement partnership that opens new routes to Alliance contracts. US Contracts: Lockheed Martin, RTX, L3Harris and HII secured new Pentagon awards as defense spending rises amid the Iran conflict.

Cybersecurity: Microsoft says China-linked hackers used AI to automate attacks on hundreds of organizations, including defense and aerospace, exploiting trusted software providers to access cloud systems. Combat Aircraft: General Atomics says the U.S. Air Force has awarded a production contract for its FQ-42A uncrewed combat aircraft, with manufacturing already underway. Major Orders: Italy has awarded contracts worth about €3.7 billion for Panther-based tanks and Lynx armored vehicles. Defense Investment: Telangana plans a new aerospace and defense policy to attract manufacturing and technology investment; the UK is also preparing billions in funding for defense firms and military technology. New Capabilities: Startup Warhound raised $200 million to develop genetically enhanced working dogs, while Ukraine’s F-Drones is developing a low-cost jet-powered interceptor to counter attack drones. Industry Oversight: South Korea is considering stripping LIG Defense & Aerospace of contractor status after alleged bribery, potentially blocking it from a counter-drone production deal. Space Dependence: Ukraine’s Starlink disruption has renewed scrutiny of how heavily military operations rely on SpaceX’s satellite network.

Border Infrastructure: Himachal Pradesh approved forest-land transfers for ITBP outposts and an Army facility in Lahaul-Spiti and Kinnaur. Indian Defence Manufacturing: Telangana is courting defence and aerospace firms ahead of December’s Raksha Expo, with a new policy targeting a national industry hub by 2030; India also awarded BEL a ₹770 crore contract for Army radars. Research & Procurement: UK defence lab Dstl hired Oxford-based First Light Fusion for high-velocity impact testing, while Ukraine’s entry into NATO’s procurement agency opens new contract routes for its defence firms. Major Programs: Lockheed Martin unveiled a 10-year framework to produce 850 F-35s. Denmark is pursuing long-range strike munitions, and Germany is reportedly seeking thousands of missiles from European and Ukrainian manufacturers. Satellite Support: Musk says Starlink restrictions address misuse by Ukrainian forces, while U.S. lawmakers are pressing the Pentagon to expand Starshield support and prevent interruptions to Ukraine’s battlefield communications.

Ukraine’s Defense Industry: Defense Minister Yevhenii Khmara told manufacturers the government is working on more predictable procurement and production rules, with exports considered only after domestic military needs are met. Kyiv also sanctioned Russian missile makers and suppliers, while Ukrainian forces struck two plants linked to Russian weapons production. European Drone Push: Germany is negotiating to buy Ukrainian-made Bars jet drones, with a range of 1,000 kilometers; the countries agreed in July to jointly produce them. Berlin is also planning large purchases of long-range weapons. Türkiye’s Contract Growth: The defense and aerospace sector has won $15 billion in contracts this year and expects $20 billion by year-end. Exports rose 15.6% in January–September to $6.93 billion. Aircraft Production: General Atomics and Spirit Defense are teaming up to support production of the FQ-42 collaborative combat aircraft, as the U.S. Air Force plans to acquire hundreds of drone wingmen. Lockheed Martin also unveiled a 10-year framework to produce 850 F-35s. Radar Procurement: India’s Defense Ministry signed a 7.7-billion-rupee contract with Bharat Electronics for lightweight low-level radars for the Army.

Fighter Production: Lockheed Martin unveiled a 10-year framework to produce 850 F-35s for the U.S. military, with the plan still awaiting congressional authority and funding. Shipbuilding: Wildcat Defense agreed to buy Wisconsin’s Fraser Industries and plans to invest $350 million in the shipyard, expanding U.S. defense manufacturing capacity. Missile Procurement: Germany is discussing purchases of thousands of long-range missiles, including potential joint production of Ukraine’s Bars cruise missile; France ordered four more SAMP/T NG air-defense batteries. Autonomous Systems: General Atomics is partnering with Spirit Defense to build FQ-42 uncrewed combat aircraft, while U.S. trials showed a modified logistics drone intercepting attack drones with guided rockets. Defense Investment: Palmer Luckey and Ben Lamm launched Warhound with $200 million to develop military working dogs, aiming to address a supply shortage.

Air Defence: France ordered four additional SAMP/T NG firing units, bringing its planned total to 12. Germany is negotiating purchases of thousands of long-range missiles from European, US and Ukrainian manufacturers, with a possible €12 billion arsenal plan as US Tomahawk deliveries face delays. Production Capacity: Nikon Advanced Manufacturing won a Pentagon contract to install large-format 3D-printing systems for Tomahawk missile components, supporting efforts to scale production. Canadian Industry: Seaspan launched a venture fund for Canadian defence and marine technology firms and partnered with BDC to connect smaller suppliers with financing and shipbuilding opportunities; no fund size has been disclosed. Major Procurement: The Pentagon plans to buy 850 F-35s from Lockheed Martin over a decade, while Denmark selected long-range US and Norwegian missiles. Industry Partnerships: India and Poland agreed to establish a defence-industry dialogue focused on co-development and production, alongside a goal of doubling trade by 2030. Thales reported €11.3 billion in defence orders over nine months as European rearmament lifts demand.

Major Programs: The Pentagon and Lockheed Martin struck a 10-year framework for 850 F-35s, with production and sustainment planned at 156 jets a year. The U.S. Army is also seeking more 155mm howitzer barrels as demand rises. Industrial Partnerships: India and Poland agreed to launch a defence industry dialogue and pursue co-development and co-production, alongside a goal to double trade by 2030. Ukraine’s Supply Chain: NATO will let Ukraine buy weapons and ammunition through its procurement agency. Kyiv is also opening underground defence-factory construction to private investors and simplifying imports of production components. Shipbuilding: Wildcat Defense agreed to acquire Wisconsin’s Fraser Industries and plans a $350 million investment to expand the shipyard and workforce. Allied Rearmament: Denmark ordered long-range U.S. and Norwegian missiles, while France contracted for four additional SAMP/T NG air-defence firing units. Qatar, Türkiye, Pakistan and Indonesia also signed a pact to expand defence cooperation and industry ties.

F-35 Production: The Pentagon and Lockheed Martin agreed on a 10-year framework for at least 850 U.S. F-35s, spare parts and fleet support. Lockheed will invest at least $7 billion, pending congressional approval and funding. Defence Industry Ties: Türkiye, Qatar, Pakistan and Indonesia signed the Badr cooperation accord to expand joint production, technology sharing, training and research. Industrial Expansion: Wildcat Defense is acquiring Fraser Shipyards and plans to invest $350 million to grow shipbuilding and repair on the Great Lakes. India–Poland Cooperation: The countries agreed to establish a Defence Industry Dialogue focused on joint development, production and technology partnerships. Regional Capability: India’s Defence Ministry signed a ₹770-crore contract with BEL for low-level light-weight radars for the Army. Ukraine’s former military chief, meanwhile, warned that a lack of state strategy leaves its defence manufacturers operating as a collection of separate firms.