Defence industry policy

The aim of the defense industry policy is the emergence and sustainability of a globally competitive, export-oriented, and value-adding defense industry in Estonia, which serves as a reliable partner for the country during times of peace, crisis, and war.

The defense industry is part of Estonia's broad national defense strategy, involving the production of dual-use goods. If national security interests justify the state's involvement in the defense industry, the state considers such an option. It is important for the state to focus its resources, take a pragmatic approach, create a supportive environment, and avoid protectionism.

Defence industry companies are engaged in research and development, production for defense and security purposes, or providing related services. The defense industry is distinguished from other sectors by close cooperation between the state and businesses, which imposes higher demands on both parties, such as limited end-users for products, exceptional export regimes, sales environments, increased risk of industrial espionage, and higher security requirements.

The first Estonian defence industry policy, approved in 2013, gave rise to the systematic development of the sector. The policy’s objective is the establishment and sustainability of a globally competitive, export-oriented, and highly developed defense industry in Estonia. The sector, in its current capacity, requires more diverse state support, particularly in international activities.

The development of the defense industry is closely linked to both the country's general and defense-related research and development activities, as well as both domestic and international dimensions. Therefore, the alignment of the defense industry policy with the following documents is monitored:

  • Research and Development, Innovation, and Entrepreneurship (TAIE) Development Plan 2021-2035;

  • Ministry of Defence governance area’s science and innovation policy.

The ministry of defence's focus regarding defence industry development 

The development of the defense industry is important to the Ministry of Defence because a strong domestic defense industry supports the country's defense capabilities, reflects the ministry’s contribution to economic development, and strengthens allied relationships through export deals and international cooperation projects. Competitive companies and good defense industry relations help enhance Estonia's international reputation. The defense industry is a key part of the country's defense capabilities during times of peace, crisis, and war.

The defense industry is a unique sector because, in addition to its typical contribution to societal welfare and job growth, it supports Estonia’s defense capabilities. The defense industry must be developed systematically through cooperation between the state’s various stakeholders and institutions.

The role of the Ministry of Defence:

  • Directs the development of the defense industry;
  • Organises the preparation of companies under the ministry’s jurisdiction for wartime operations in case of war;
  • Guides national defense-related research and studies in the field of equipment and the defense industry.

Last updated: 09.03.2026

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