Zelenskyy: Ukraine’s $35 billion defence industry held back by financial gaps

Ukraine’s defence industry has the technical capacity to manufacture up to 8 million drones per year, but the scale of production is constrained by a lack of sufficient financing.

This was highlighted by President Volodymyr Zelenskyy during his address at the Defence Industries Forum held in The Hague, Caliber.Az reports, citing Ukrainian media.

“The potential of our defence sector exceeds $35 billion,” Zelenskyy said, emphasising the scale of domestic military capabilities. “This includes nearly 1,000 military systems — from artillery to advanced drones, cutting-edge warfare technologies, and missile systems.”

Despite this vast capacity, Zelenskyy noted that a significant portion of it remains underutilised due to financial limitations. “Around 40% of this potential does not have the necessary funding. And that is a serious problem,” he said.

He pointed to drone production as a key example: “We can produce approximately 8 million drones of various types per year, but our current funding supports the manufacturing of far fewer.”

Since the onset of Russia’s full-scale invasion, Ukraine has drastically expanded its domestic production of both reconnaissance and strike drones. Ukrainian companies have also begun to manufacture long-range UAVs capable of reaching targets deep inside Russian territory.

Earlier this month, on June 2, Deputy Defence Minister Oleksandr Kozenko stated that Ukraine’s defence industry has the potential to produce up to 10 million drones annually.

In a major development today, the Netherlands signed contracts for the production of 600,000 Ukrainian-made drones for delivery to Ukraine as part of the “Drone Line” initiative. These deliveries are set to begin later this year.

Defence Minister Rustem Umerov confirmed the news, explaining that the drone contracts form part of a new Dutch aid package worth over €675 million. The package also includes 100 additional radar systems for detecting UAVs, as well as medical evacuation equipment.

“I sincerely thank the Netherlands, and personally my friend Defence Minister Ruben Brekelmans, for their leadership and strong support,” Umerov said. “This is a true example of partnership and belief in Ukraine’s victory. Together, we are doing everything to ensure our armed forces maintain a technological edge on the battlefield.”

In addition, it was announced on June 23 that the United Kingdom will also provide funding for the production of Ukrainian drones.

By Tamilla Hasanova