The nation’s military expenditure was increased again in 2014, when the Crimean crisis began. In 2014, the defence budget of Ukraine was increased by some 13.4 billion UAH (approximately 447 US$ million), reaching 27 billion UAH (approximately 1.2 US$ billion).  This increasing trend continued in 2015, when the defence budget amounted to 46.7 billion UAH (almost 1.8 US$ billion).

After the fall of the communist regime, as previously discussed, Ukraine inherited a vast portion of the Soviet defence industry. It is indicative that at the end of the 90s, Ukraine housed 30% of the Soviet defence industry, and it was home to approximately 750 factories and 140 scientific and technical organizations. Over the following decade, Russia and Ukraine signed several agreements in order to encourage cooperation in the industrial sector, thus trying to keep the production of defence equipment unaffected. Nevertheless, this was not achieved, as cooperation between the two countries’ defence industries declined significantly.

Currently Ukraine retains a rather extensive defence industry, with capabilities in several domains. Ukroboronprom, a state owned conglomerate, is in charge of the military–industrial complex of the country and comprises of more than 100 companies. Companies-members of Ukroboronprom employ approximately 80,000 people, many of which have high academic degrees in engineering, applied mathematics, physics, etc. The local industry is naturally the main supplier of Ukraine’s defence equipment.

According to the Ukroboronprom website, there are 20 comprising enterprises with capabilities in armoured combat vehicles, 19 with capabilities in the shipbuilding industry, 29 with capabilities in the radar location and air defence domain, 21 in the missile artillery and munitions product line, and 29 in the aircraft engineering and maintenance services domain. In more detail and among others, these companies produce: tanks, armoured personnel carriers and other wheeled and tracked vehicles, armament systems, simulators, aircraft, UAVs, missiles, ships and vessels, floating docks, shipboard weapon systems, radars and sonars, air defence equipment and equipment for radio-electronic warfare and reconnaissance, missile systems, guided missiles and bombs, artillery, armaments and explosives. The strategic objective of this group, is to become one of the world’s top-five arms exporters (in 2015, the company held the 81st position in the SIPRI’s top 100 Arms Producing and Military Services Companies).

One of the most renowned companies within Ukroboronprom, is Antonov. The company has been producing aircraft for more than 60 years and they have capabilities to serve the whole lifecycle of development of modern aircraft (from research and design, up to MRO and life extension/upgrade programmes). Motor Sich is another prominent member of the Ukrainian aerospace industry. They manufacture and maintain aircraft engines, auxiliary power units, helicopter gearboxes and gas turbine power plants, for many years now.

Ukraine exports a fair amount of weapons. China, India and Russia are some of the most important traditional markets for Ukrainian military products. Nevertheless, in March of 2014, during the Crimean crisis, Ukroboronprom banned all exports of weaponry and military equipment to Russia.

Ukraine’s Defence Exports geographic dispersion (2010-2015)

As is clearly depicted in the map above, exports from Ukraine are not limited in terms of their geographical dispersion, as the country exports to Europe, Africa, the Middle East, Asia and South America. More on that, Ukroboronprom has in recent times signed cooperation agreements with AICC, Aerospace Industry Corporation of China, for the An-225, with Indonesia for more than one type of defence joint projects (aircraft maintenance, armoured vehicles and weapons/ordinance supplies) and the UAE for military and technical cooperation.

Finally, the country recently (2016) deepened its defence cooperation with India, Sweden and Pakistan. Reliance Defence and Engineering, a leading company from India, signed agreements with three Ukrainian companies within Ukroboronprom, in order to collaborate on a variety of military products such as transport aircraft, armoured vehicles, maritime gas turbines and unmanned aerial vehicles. Also, the Ministers of Defence of Ukraine and Sweden met in an official meeting that took place in Stockholm and agreed on sharing experiences, particularly, in terms of achieving NATO capacities and compatibility. As for Pakistan, officials from both countries met and discussed their potential cooperation with a focus on joint production of tanks and anti-tank missile systems. As a result in this case, according to the Ministry of Defence, Ukrainian defence firms will receive US$ 600 million in associated orders.