MILAN — Ukraine may lift an export ban on drone systems to generate revenue for local companies, a move one manufacturer argues is overdue.
Since the Russian invasion of Ukraine in 2022 Kyiv has prohibited the export of military goods to other countries to guarantee that the Ukrainian armed forces are supplied with the equipment they need to continue defending their territory.
While the ban has allowed smaller local defense companies to grow at a fast rate, thanks to an initial boost of orders by the state, the policy is now hurting their business, Anatolii Khrapchynskyi, deputy director general of Piranha Tech said.
“It has opened up opportunities for private companies to produce weapons and led to the emergence of numerous firms that, in two and a half years, have grown from garage-based startups to stable companies capable of fulfilling a large number of orders,” he told Defense News. “At the same time, as firms have scaled up their capabilities, they’ve accelerated to a level the state cannot fully procure from.”
Piranha Tech has specialized in the development and production of electronic-warfare systems, radio-jamming as well as drones and counter-drone systems since 2014.
Khrapchynskyi noted that most of the investments in research and development came either from the companies’ own funds or small grants provided by platforms like Brave1, a Ukrainian government entity responsible for fast-tracking the delivery of weapon samples to the frontlines.
At the rate defense systems have evolved on the battlefield, research and development has become more expensive, and having the state as the sole customer is no longer sufficient for many firms, the argument for lifting the export ban goes.
According to Ukrainian media, a government working group on arms exports has been working since August on assessing risks that would come with the country re-entering the global arms market, and setting conditions that could make this possible.
Khrapchynskyi told Defense News he supports the initiative, saying reconnaissance drones could serve as a test case because they are useful in military and civilian applications alike.
“Security and the end-user are of the utmost importance – we could also consider selling earlier versions that are not cutting edge, but companies must guarantee that state contracts remain a priority and be fulfilled on time,” Khrapchynskyi said.
A requirement to invest some of the profits into company research and development also should be on the table, he added.
One of the biggest issues associated with lifting the wartime ban on these weapons is the possibility for Russian forces to get their hands on information and technology.
“We see how Russia circumvents sanctions, so we understand that they will certainly start looking for ways to obtain certain means for copying [weapons] or developing countermeasures against them,” Khrapchynskyi said.
Elisabeth Gosselin-Malo is a Europe correspondent for Defense News. She covers a wide range of topics related to military procurement and international security, and specializes in reporting on the aviation sector. She is based in Milan, Italy.
