Croatia’s Defence Budget has experienced a significant reduction in nominal values in the last few years. This drop is also reflected in the percentual GDP allocation to Defence. In 2015, the Defence Budget reached some HRK 4.6 billion, corresponding to 1.37% of the GDP. Furthermore, forecasts indicated an increased portion of the defence budget to be allocated for the next couple of years (2017 – confirmed by the release of the 2017 Procurement Plan by the MoD-, and 2018), for procuring equipment and modernising the Croatian Armed Forces, as far as for example the continuation of the acquisition and overhaul of self-propelled PzH 2000 Howitzers, the procurement of OH-58D Kiowa Warrior helicopters, the overhaul of Mi-171Sh helicopters, and the M-84 tanks upgrade.

The Croatian defence industry developed swiftly during the armed conflicts of 1991-1995, as a result of the need for self-defence of the nation. At that time, numerous new businesses were established, offering an array of products/activities across the defence spectrum, such as the manufacture of weapons, ammunition and equipment.  

In the post 1995 period, the Croatian defence industry further evolved, through the application of new technologies, concepts and the adoption of western (incl. NATO) quality standards, which allowed the sector to meet the demands of the Modernised Croatian Armed Forces, as well as to enter international markets. Croatia’s accession to NATO in 2009 and the European Union in 2013 respectively, further aided the evolution of the country’s defence industry.

Enjoying the support of the Croatian Ministry of Defence and the Armed Forces (indicated on various occasions by the emphasis placed on the fact that Croatian soldiers and officers were equipped and armed with products “Made in Croatia“), the Croatian Defence Industry was further fostered through the experienced gained by the participation of the CAF in international operations (UN and NATO led), proving the industry’s ability to adapt to different markets.
With regards to the industry’s exports, according to the Government Agency “Alan”, the total value of the Croatian military equipment exports, in 2014, was HRK 1.5 billion (approximately US $214 million) –including agreed and realised deals- , representing an increase of 20% when compared to 2013. Historically, the exported arms and equipment, have been manufactured by some twenty Croatian companies and exported to Argentina, Austria, Australia, Spain, Sweden, Switzerland, USA, UAE, Kuwait, Poland, Bulgaria, Italy, Saudi Arabia and Ukraine.  

Nowadays, the sector manufactures a wide variety of equipment and provides numerous related services, among which are the following:

  • Small arms (including pistols, assault and sniper rifles, multi-grenade launchers and submachine guns)
  • Mortars and Mortar Bombs
  • Multiple Rocket Launchers and Rockets
  • Optical sights
  • Electronics and electro-optics equipment
  • Personal Protection equipment
  • Demining robots
  • Fire-fighting equipment
  • APC Vehicles & Tanks upgrades/modernization
  • Naval vessels and related equipment
  • Tents and related equipment
  • Training & Education equipment
  • Geo-information Systems

Moreover, it cannot be omitted to mention the technologic capabilities of the Đuro Đaković Group. The company’s products & services include production of armoured combat vehicles and maintenance of these, tanks and mine sweepers, as well as development, production and integration of NATO interoperable systems.  

Further, according to the Government Agency “Alan”, the Croatian Defence Industry, apart from the design and manufacture of military equipment, provides logistics and other services, such as supply, maintenance, transportation, mediatory services and freight forwarding.

Croatia’s strong military tradition in the production of weapons, is reflected in recent history by "Đuro Đakovic" development of the advanced battle tank M–84 and the "3. MAJ TIBO" factory’s development of the missile system STRIJELA 10-CRO.
Today, the "HS Produkt" company designs, manufactures and sells more than a few million pieces of gun series HS and XD per annum, while the factory "Sestan Busch" produces more than 500,000 helmets.

Other prominent Croatian defence manufacturers include the companies "M Adler D Ltd" and "JLM Perkovic", which respectively produce Multiple Grenade Launchers (RBG-6) and Anti-Material Sniper Rifles of 20mm calibre.
In addition, the shipyards "Kraljevica", "Greben", ''Brodosplit'', ''Viktor Lenac'' and ''Adria-Mar" manufacture various types of patrol boats, fast missile corvettes, mine sweepers, transport boats and transport logistics ships.

Finally, the "DOK-ING" company develops and manufactures remote-controlled robots, designed to clear all types of mines. A number of governmental institutions and companies from several countries around the world use ‘DOK-ING’ demining vehicles. Such entities include the Armed Forces of Australia, Austria, Croatia, Colombia, Greece, Ireland, Italy, Lebanon, Libya, Lithuania, Nicaragua, Sri Lanka and Sweden.
Notably, the Croatian Defence Industry, in terms of realised exports, has penetrated some ‘prestigious’ defence markets, including those of highly developed countries, such as Australia, Spain, Sweden, Switzerland, the US and Italy. The high expertise, skilled labour force, and innovation exhibited, guarantee the high quality of the Croatian defence products and services.