Autore: Giuseppe Gagliano – 22/12/2025
Resilience, Challenges, and Future of the Russia’s Defense Industry
Giuseppe Gagliano – Cestudec, President
Abstract – The article examines the complex reality of Russia’s defense industry (oboronno-promychlennyï kompleks, OPK), highlighting its strategic importance for the Kremlin and the structural challenges exacerbated by the war in Ukraine. Despite unprecedented mobilization, with investments amounting to 6.7% of GDP and over 520,000 new jobs, the industry remains heavily reliant on foreign suppliers and outdated materials. Western sanctions have compromised the quality of advanced products, but Russia has responded with adaptation strategies, including partnerships with countries like Iran and North Korea. Nonetheless, uncertainties remain about the sustainability of this effort in the long term and the economic impact of resources concentrated on defense. While the OPK shows resilience, its future will depend on the ability to build a sustainable and competitive model.
Keywords: Russian Defense industry, Western sanctions, Technological dependence
The Complex Reality of Russia’s Defense Industry: Between Ambitions, Challenges, and Resilience
Russia’s defense industry, known as oboronno-promychlennyï kompleks (OPK), has always been a strategic pillar for the Kremlin, tasked with bolstering the country’s military capabilities and supporting its international projection. However, before 2022, the sector was already on an uncertain trajectory, struggling to move beyond its Soviet technological heritage and heavily reliant on Western components and machinery. The war in Ukraine, now in its third year, has brought new pressures and challenges, exposing both the chronic limitations of the Russian industry and its surprising ability to adapt.
A Sector Under Pressure: Mobilization of the OPK
The mobilization of Russia’s defense industry was formalized in September 2022, alongside the call-up of 300,000 men to support the war effort in Ukraine. Vladimir Putin ordered the OPK to focus exclusively on meeting the needs of the armed forces. However, the sector, already plagued by inefficiencies, corruption, and a chronic lack of skilled labor, faced significant difficulties.
In this initial phase, chaos reigned. Companies, under the threat of government takeover for contract delays, had to scramble to find solutions, even repurchasing spare parts already delivered to foreign customers like India and Myanmar. In December 2022, for example, Uralvagonzavod spent $24 million to buy back sighting telescopes and cameras to upgrade its T-72 tanks.
As the conflict escalated and international pressure mounted, the government intensified its involvement in the industry. Starting in autumn 2023, companies were authorized to utilize mobilization capacities maintained since the Cold War. Facilities extended work shifts, and the defense budget was raised to 6.7% of GDP for 2024, nearly doubling from 2023. There was a significant increase in employment in the sector, with Putin announcing the creation of over 520,000 new jobs in 18 months.
Expansion and Production Limitations
Leading OPK companies, such as Almaz-Antey and Kalashnikov, launched new projects to boost production. Kalashnikov, for instance, doubled the output of Vikhr and Kitolov missiles, while Rostec opened a production line for 35,000 quadcopters annually. However, this growth masks structural fragilities. Many new systems are updated versions of older models, like the T-72 tanks, while more advanced systems suffer from Western sanctions that restrict access to semiconductors and other critical technologies.
Despite the massive mobilization, the production of complex equipment, such as Iskander and Kalibr missiles, has not reached pre-war levels. Western experts argue that sanctions have reduced the quality of components, while Russian manufacturers emphasize production volumes, often relying on repairs and upgrades of outdated materials. For less sophisticated weaponry, however, Russia appears capable of sustaining production indefinitely, underscoring its resilience.
The Issue of the International Market
The war in Ukraine has had a devastating impact on Russian arms exports, which dropped from $15 billion annually (pre-war average) to $8 billion in 2022, with a further decline in 2023. The prioritization of domestic demand forced Moscow to abandon historical clients like Indonesia and Egypt, while U.S. secondary sanctions further complicated new contract negotiations.
Nevertheless, the Kremlin remains optimistic about the future. Rosoboronexport officials, the state arms export agency, highlight that the conflict experience has enabled testing of new technologies in the field, such as Lancet drones, Vikhr missiles, and counter-MANPADS systems. Once improved, these products could become key players on the global market. Notably, the Federal Service for Military-Technical Cooperation has come under the direct supervision of the Russian Security Council, led by former Defense Minister Sergei Shoigu.
Global Interdependence and the Challenge of Sanctions
Despite rhetoric of self-sufficiency, Russia’s military industry remains heavily dependent on foreign suppliers, particularly for electronic components and machine tools. China has taken on a key role as an alternative partner, but many technologies continue to enter Russia through third countries not bound by Western sanctions. However, the use of dual-use components entails higher costs and potential quality issues, reducing the overall efficiency of the OPK.
To address these limitations, the Kremlin is exploring partnerships with countries like Iran and North Korea, sharing technologies and production capacities to develop weapons collaboratively. For instance, Russia has started licensed production of Iranian drones, such as the Shahed, used both in Ukraine and for strategic deterrence. According to estimates, these collaborations could account for up to 40% of the global arms market by 2030. Russia’s approach leverages a dual advantage: strengthening ties with partner countries and reinforcing its industrial base through shared expertise.
This strategy reflects an awareness of the limitations imposed by sanctions but also a determination not to relinquish Russia’s role as a global arms exporter. However, the impact of U.S. secondary sanctions remains a significant barrier. Countries in the “Global South,” while not aligned with the West, exhibit caution, fearing political and economic repercussions.
An Uncertain Future Between Conflict and Economic Strategy
The intensification of the war in Ukraine has forced the Kremlin to redefine its economic and strategic priorities, strengthening the link between the military industry and national economic development. The appointment of Andrey Belousov, an economist known for his interventionist approach, as Minister of Defense signals a desire to further integrate the defense industry into the Russian economy. The transition toward a more innovative production model is seen as a response to the economic and technological challenges posed by the war and sanctions.
Despite this, questions remain about the long-term sustainability of this effort. Over-concentrating resources on the defense industry could distort the Russian economy, putting pressure on the labor market, fueling inflation, and potentially stagnating technological innovation in non-military sectors. Additionally, reliance on retrofitted materials and old military stock is not infinite and could become a critical limitation in the coming years.
Conclusions: Resilience and Vulnerability
Russia’s defense industry has demonstrated significant resilience, maintaining production despite sanctions, international pressure, and structural deficiencies. However, this resilience is built on fragile foundations, such as dependence on foreign suppliers and an inability to innovate rapidly in key sectors. The Kremlin hopes that its substantial investment in the OPK can serve as a driver for broader economic transformation, but past experience suggests that systemic corruption and inefficiency could limit the benefits of this strategy.
As the war in Ukraine drags on and the confrontation with the West intensifies, Russia faces a historic challenge: maintaining its role as a military power without undermining its domestic economic stability. In this sense, the future of the OPK will depend not only on its ability to adapt to current pressures but also on its success in building a sustainable and competitive model over the long term.
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