Strategic Context
The UAE has emerged as one of the most significant defence spenders in the Middle East and among the top arms importers globally. Annual defence expenditure is estimated at $20 to $25 billion, representing approximately 5 to 6 percent of GDP. Historically, the vast majority of this spending flowed to foreign equipment suppliers, principally from the United States, France, Russia, and Europe. Over the past decade, however, the UAE has pursued an aggressive strategy to build domestic defence manufacturing capabilities, reduce dependency on foreign suppliers, and position itself as a defence technology exporter.
This strategy reflects both security imperatives and economic logic. Security considerations include ensuring supply chain sovereignty in an environment where arms transfers are subject to political conditionality. The economic rationale centres on capturing industrial value from defence spending, creating high-skill employment for UAE nationals, and leveraging military technology for dual-use commercial applications.
EDGE Group: The National Defence Champion
EDGE Group, established in 2019 through the consolidation of over 25 UAE defence and technology companies, is the centrepiece of the domestic defence industrial strategy. The conglomerate is organised into five clusters covering platforms and systems, missiles and weapons, cyber defence, electronic warfare, and mission support.
| EDGE Cluster | Focus Area | Key Capabilities |
|---|---|---|
| Platforms & Systems | Armoured vehicles, naval vessels, UAVs | Rabdan IFV, Falaj armoured vehicle |
| Missiles & Weapons | Guided munitions, loitering munitions | Desert Sting, Shadow series |
| Cyber Defence | Cybersecurity, signals intelligence | DarkMatter heritage capabilities |
| Electronic Warfare | EW systems, C4ISR | Sensor fusion, electronic countermeasures |
| Mission Support | MRO, logistics, training | Aircraft maintenance, simulation |
EDGE Group reported revenues exceeding $6 billion and a workforce of approximately 15,000 employees. The company has been ranked among the top 25 defence contractors globally by revenue, a remarkable achievement for a group that has existed for fewer than ten years. Its growth has been driven by domestic procurement mandates, government-directed consolidation of fragmented entities, and an export push into markets in the Middle East, North Africa, and Asia.
Unmanned Aerial Vehicles
The UAE has invested heavily in unmanned systems, both for domestic military use and export. EDGE subsidiary HALCON and other entities have developed a range of unmanned aerial vehicles (UAVs) spanning tactical reconnaissance drones, medium-altitude long-endurance (MALE) platforms, and loitering munitions. The operational use of UAVs by the UAE military in Yemen and Libya demonstrated the country’s proficiency with unmanned systems and generated international demand for UAE-developed platforms.
The UAE’s UAV capabilities compete with offerings from Turkey (Bayraktar), China (Wing Loong), and Israel in a rapidly growing global market. The ability to offer UAV systems without the political constraints that accompany US or European exports has been a significant competitive advantage.
Tawazun Economic Council and Offset Programme
The Tawazun Economic Council administers the UAE’s defence offset programme, which requires foreign defence contractors awarded contracts above a threshold value to reinvest a percentage (typically 60 percent) of contract value into the UAE economy. This programme has been a primary mechanism for technology transfer and industrial capacity building.
Tawazun’s offset programme has catalysed the establishment of joint ventures, technology licensing agreements, and manufacturing facilities across the UAE. Notable examples include ammunition manufacturing, armoured vehicle assembly, and naval maintenance, repair, and overhaul (MRO) capabilities. The programme has evolved from simply requiring financial offset commitments to actively directing investments into strategic industrial sectors aligned with national priorities.
Key Defence Manufacturing Capabilities
| Capability | Entity | Status |
|---|---|---|
| Armoured Vehicles | NIMR (EDGE subsidiary) | Series production, export orders |
| Naval Vessels | Abu Dhabi Ship Building | Corvettes, patrol boats, landing craft |
| Ammunition | Tawazun/Burkan | Full-scale domestic production |
| Guided Munitions | HALCON (EDGE subsidiary) | Indigenous development, combat-proven |
| Aircraft MRO | Etihad Engineering, AMMROC | Regional MRO hub |
| Cybersecurity | DarkMatter/EDGE Cyber | National and export capabilities |
| Simulation and Training | EDGE Mission Support | Advanced training systems |
The UAE’s manufacturing base is concentrated in Abu Dhabi, with facilities in Tawazun Industrial Park, KIZAD, and other designated zones. The workforce combines UAE national engineers and managers with international technical expertise, reflecting the sector’s role as a vehicle for knowledge transfer and Emiratisation.
Defence Exports and International Partnerships
The UAE has transitioned from being purely a defence importer to an emerging exporter. EDGE Group and its subsidiaries have secured export contracts for armoured vehicles, unmanned systems, guided munitions, and cybersecurity solutions in markets across the Middle East, South Asia, and Africa. The IDEX and NAVDEX exhibitions, held biennially in Abu Dhabi, serve as global showcases for UAE defence capabilities and platforms for international partnership development.
Strategic defence relationships with the United States, France, South Korea, and Israel provide the UAE with access to advanced platforms (F-16s, Rafale fighters, missile defence systems) while generating technology transfer opportunities that feed into domestic industrial capabilities.
Workforce and Emiratisation
The defence sector is a priority area for Emiratisation, with targets to increase the share of UAE nationals in technical and managerial roles. EDGE Group has invested in graduate training programmes, engineering scholarships, and partnerships with UAE universities to build a pipeline of national talent. The sector’s appeal to young Emiratis, combining technology, national service, and competitive compensation, positions it as one of the more promising domains for meaningful nationalisation of the workforce.
Outlook and 2031 Alignment
The UAE defence industry is expected to continue its growth trajectory, driven by sustained government procurement, export expansion, and the integration of emerging technologies including artificial intelligence, autonomous systems, and space-based surveillance. The sector’s alignment with We the UAE 2031 objectives is multifaceted: it supports industrial diversification, creates high-value employment, enhances national sovereignty, and serves as a vehicle for advanced technology development with dual-use applications across civilian sectors.