The UAE is the second largest investor in defense sector after Saudi Arabia in the Middle Eastern region with a total budget of $23.2 billion in 2023. The total forecasted investment of $129.3 billion over the period 2024-28 reflects the UAE’s plans to equip itself with advanced arms and equipment, primarily to deter Iran from taking an aggressive posture and fortify its national security against Yemeni insurgent group, says GlobalData, a leading data and analytics company.

GlobalData’s latest report, “The UAE Defense Market Size and Trends, Budget Allocation, Regulations, Key Acquisitions, Competitive Landscape and Forecast, 2023-28,”  reveals that the country’s increasing military expenditure makes it one of the most lucrative defense markets in the Middle Eastern region. The country’s acquisition expenditure, which recorded $4.1 billion in 2023, is anticipated to grow at a CAGR of 5.7% to reach $5.1 billion in 2028.

Over the period 2018-23, the UAE has signed several defense deals to modernize its inventory. The country also focusses on the development of its indigenous defense industry. The country is going to host the next biennial defense exhibition IDEX from 20 to 24 February 2023, which will act as a perfect market route for companies to showcase their products.

Akash Pratim Debbarma, Aerospace & Defense Analyst at GlobalData, comments: “The UAE’s efforts to develop its domestic defense capabilities encourages foreign defense companies to start joint ventures with domestic companies. The deals to jointly develop fifth generation aircraft with Russia’s Rostec and next generation multi-mission cargo aircraft with Korea Aerospace Industries show the UAE’s interest in allowing foreign companies to enter its market.”

The UAE’s military fixed wing market is anticipated to be the most lucrative market of the country. Even though it is in the process of procuring 80 units of Rafale F4 from French Dassault, the country still seeks to procure additional combat aircraft. With the ongoing Russia-Ukraine war, it is unlikely to expect the UAE inking any contract with Russia. However, GlobalData expects the European or Korean companies to take interest in this requirement.

Debbarma concludes: “The UAE not only spends a large portion of its budget for the acquisition of modern platforms and development of domestic defense industry but also focusses on the development of human capital through comprehensive training programs of the Emirati troops to enhance operational effectiveness, tactical decision decision-making, and improve mission critical elements. The country also spends on deploying its troops overseas to get exposure to various operational international military practices.”