Israel’s defense sector soars in global arms race—What’s behind the surge?

Less obvious, however, is how these homegrown systems are propelling Israel into a bigger player on the global arms market. The Stockholm International Peace Research Institute’s latest annual report, released in March 2025, reveals that Israel has climbed to eighth place among the world’s arms exporters, now commanding 3.1% of the market—a jump from 2.4% in the prior cycle. This ascent, despite the ongoing Gaza conflict, edges out Spain’s 3% share and underscores the growing demand for Israeli technology.

The United States still dominates the industry with a 43% share of global arms exports, followed by France (9.6%), Russia (7.8%), Germany (5.6%), and Italy (4.8%). Israel’s rise is fueled by key buyers like India, which snaps up 34% of its exports, with the U.S. (13%) and the Philippines (8.1%) trailing behind. On the import side, Israel ranks 15th worldwide, accounting for 1.9% of global arms purchases, with Germany supplying 11% of its imports—making Israel Berlin’s third-largest customer.

Israel’s defense industry thrives amid a shifting global landscape. Europe’s arms imports have surged 155% since Russia’s invasion of Ukraine in 2022, with Ukraine itself rocketing to the top importer spot, claiming 8.8% of the market after a jaw-dropping 9,627% increase in purchases. The U.S. provides 45% of Ukraine’s arsenal, bolstered by Germany (12%) and Poland (11%). Meanwhile, Israel’s export growth reflects its ability to market battle-tested systems like the Iron Dome and Merkava, honed in real-world conflicts.

This dual role as both exporter and importer highlights Israel’s strategic balancing act—arming allies while fortifying its own defenses. As the global arms trade heats up, Israel’s high-tech weaponry is carving out a larger slice of the pie, proving its innovations resonate far beyond its borders.