Russia's Kalashnikov concern has met its annual arms contract. The top producer of small arms has announced it delivered a batch of classic 7.62mm Dragunov sniper rifles to a Russian Security Forces customer and fully met its 2026 contract on time

The delivery shows how little the sanctions regime slows Russia's arms maker. In February 2026, Ukraine's Defense Intelligence said that nearly half of Kalashnikov's plants were still not subject to sanctions by any coalition country. Eight months later, the concern reports a full year's order delivered on schedule.

"The items were shipped on the set deadline, the obligations under the 2026 contract fully met," the manufacturer said.

A rifle in service for six decades

The weapon in that batch is not new. Designed by Yevgeny Dragunov between 1958 and 1963, the Dragunov sniper rifle entered serial production at the Izhevsk machine-building plant in 1963, so in 2026, it has remained in serial production for more than 60 years.

The self-loading 7.62mm rifle is meant to hit personnel and unarmored targets at ranges up to 800 meters, the concern said. It uses gas-operated automatics with a short-stroke piston and a gas regulator, and can fire any 7.62x54R round, though sniper ammunition yields the best grouping, according to the maker.

Sanctions chase a moving network

The sniper rifles are only one line in Kalashnikov's output. Russia's defense industry has leaned heavily on refurbishing Soviet-era armor as newer reserves run low, with Ukraine's intelligence reporting in June 2025 that Russia had begun deploying 1960s-era T-62 tanks.

The restoration work was centered primarily at the 103rd Armored Repair Plant in Atamanovka, Trans-Baikal Territory of Siberia. Ukrainian intelligence documented the transfer of 21 T-62 tanks from the eastern region to the western part.

Small arms are a different line of production, built new rather than pulled from storage. That is why a 1963 design keeps rolling off the line while the sanctions net, as Ukraine's intelligence describes it, still has holes.

More than 50 Russian companies could default on their bonds this year, the most since 2009, a rating-agency analyst told Russian newspaper Izvestia, which reported it on 6 October.

Russia's wartime economy is straining under high interest rates, and the budget is too: the 2026 deficit has nearly doubled from the earlier forecast to a record $88 billion, with more deficits planned for the next three years as Moscow raises taxes to fund the war and plans its biggest defense budget since the full-scale invasion began.

A default is a situation in which a company cannot make promised interest payments to investors on time or repay borrowed money. If a payment is not made by the agreed deadline, the company becomes delinquent, which under certain conditions is recognized as a default.

So far this year, 20 companies have defaulted for the first time, compared with 24 in all of 2025, said Mikhail Nikonov of the Expert RA rating agency. Most of the companies that missed payments are small issuers of high-yield bonds, Izvestia reported.

In 2026, Russian companies have missed payments totaling 41 billion rubles (about $490 million), compared with 34 billion rubles (about $410 million) the previous year, according to investment bank Sinara.

Russia faces a new wave of corporate defaults

By the end of 2026, the number of Russian companies unable to service their ruble-denominated debt on time could reach 40–50, the highest level since 2010, said Pavel Zholobov, junior managing director at the NRA rating agency.

The number of bond defaults in 2026 has already reached its highest level in a decade, Zholobov said. Similar figures were recorded in the mid-2010s: in 2014, 35 companies missed payments; in 2015, 52 did so; and in 2016, there were 44 issuers. This occurred in part after Western sanctions were imposed on Russia over its annexation of Crimea and its war in Donbas, as well as amid a halving of oil prices and a sharp weakening of the ruble.

There were more defaults only in 2009. At the time, amid the fallout from the global financial crisis, more than 100 issuers faced payment problems, while the volume of distressed debt reached nearly 200 billion rubles, Zholobov noted.

High interest rates put pressure on companies

This time, the main reason for companies' difficulties in making bond payments has been the prolonged period of high interest rates, which has continued since 2023. Companies are raising financing at high interest rates but are unable to refinance their debt on more favorable terms, explained Ekaterina Sidorova, head of the Foreign Exchange, Commodities and Debt Markets Department at SberCIB Investment Research.

At the same time, the situation does not yet resemble a systemic debt crisis: defaults are primarily being recorded among companies with low credit ratings and high debt burdens, Sidorova said.

If a company fails to repay bond debt, it is given 10 business days to meet its obligations. If it fails to do so, the company may offer investors a restructuring—for example, by postponing payments in exchange for a higher interest rate.

The number of defaults will remain high in 2027, Sidorova believes.

High interest rates were a response to accelerating inflation in Russia. Domestic demand was outpacing production, Russia's Central Bank said in October 2023. Sanctions over the war and rising defense spending had also hit the economy and the ruble, which had lost about 25% against the dollar that year. The bank raised its key rate from 7.5% in the first half of 2023 to 15% by the fall.

Ukraine targets Russia's oil industry to weaken its war economy

Ukraine is also seeking to weaken Russia's economy as part of efforts to reduce its ability to finance the war. In particular, Defense Minister Yevhenii Khmara said strikes on oil refineries are aimed at "bleeding the Russian war machine" and destroying its military and economic potential. According to the ministry, the attacks have knocked out more than 51% of Russia's oil refining capacity.

In the first half of July, Russian oil refineries processed about 3.9 million barrels of oil per day—the lowest level since March 2005. Due to the production cuts, Moscow was also forced to restrict fuel exports.

Ukraine's 413th Separate Raid Regiment of the Unmanned Systems Forces struck the Snizhne Machine-Building Plant in occupied Donetsk Oblast in September, working with other Defense Forces units, the regiment posted on 6 October, sharing a video of the strike. The General Staff reported the strike on the plant on 11 September, saying that the extent of the damage was being clarified.

The strike adds to Ukraine's campaign of long-range attacks on Russian military targets as Russia has begun its winter campaign of strikes against Ukraine's energy infrastructure. Hitting the suppliers of aircraft parts goes after Russia's ability to keep its attack jets and helicopters flying.

The regiment said the plant works for Russia's military industry, producing engine components for attack aircraft and combat helicopters.

A former Motor Sich plant in occupied Snizhne

The Snizhne plant was a separate division of Motor Sich, a Ukrainian aircraft-engine maker based in Zaporizhzhia, a city that remains under Ukrainian control. Snizhne has been under Russian occupation since 2014. The plant specializes in producing parts for gas-turbine engines, including compressor and turbine discs and blades, the General Staff said. It never built whole engines. In September 2014, months into the occupation, it was machining blanks from Motor Sich's Zaporizhzhia plant into turbine blades and was one of only two plants in the former Soviet Union making such blades for helicopters, a plant worker said.

Motor Sich said in December 2017 that it had lost control of the plant. Weeks later, Viacheslav Bohuslaiev, then Motor Sich's honorary president and a member of parliament, told RFE/RL's Donbas.Realii that Motor Sich still owned the plant and had handed its management to a foreign company, while keeping it under the company's "full control."

In February 2023, Ukraine's Prosecutor General's Office served Bohuslaiev a notice of suspicion of aiding a terrorist organization, alleging that Motor Sich shipped blanks to the Snizhne plant and received finished engine parts through foreign-registered companies. The case went to court in October 2023, and Bohuslaiev, who denies the charges, has been in pretrial detention since October 2022 as the trial continues.

Snizhne, which Russia uses as a rear base, has been hit before. In May, Ukraine's Unmanned Systems Forces and the Security Service of Ukraine struck a Russian training center for drone pilots in the city, and in September, a strike on energy infrastructure cut power across Snizhne.

German radar maker Hensoldt has signed a memorandum with Ukraine's Defense Ministry for more large-scale radar deliveries, the company said on 5 October. Ukrainian defense outlet Defense Express reads it as a step toward fitting Hensoldt's TRML-4D, already in Ukrainian service, into FREYJA, a planned shield against ballistic missiles.

Ballistic missiles remain the hardest threat in Russia's air war. After Russia's overnight barrage on 7 October, Ukrainian President Volodymyr Zelenskyy said Ukraine is still searching daily for Patriot missiles. The only other system Ukraine can use against them is the Franco-Italian SAMP/T, which fires Aster 30 interceptors made in small numbers. That gap is why Fire Point is reworking its FP-7 missile into a Patriot-like interceptor. Such an interceptor still needs radars to find its target first.

A memorandum signed during Merz's visit

Hensoldt CEO Oliver Dörre signed the document on the sidelines of German Chancellor Friedrich Merz's visit to Ukraine. Beyond deliveries, it covers further development of radar capabilities. The partners will also study options to deploy and jointly operate TRL-4D LR long-range radars. Hensoldt said this expands cooperation already agreed on in ballistic missile defense.

The TRL-4D LR is the land-based version of a long-range radar Hensoldt also builds for the German Navy, German outlet Sicherheit & Verteidigung reported. The outlet cited Germany's defense procurement office as giving the naval version a range of more than 400 km (250 miles) against air targets. That, it concluded, puts the range well beyond the TRML-4D's.

"The Ukrainian air defence forces urgently need our high-performance radars to help protect infrastructure such as bridges," Dörre said.

Defense Express, describing the same memorandum, tied both the mass deliveries and the joint-operation plan to the TRML-4D. Hensoldt's release names no model for the deliveries and links joint operation to the TRL-4D LR.

Eyes for FREYJA

Hensoldt and Fire Point signed a memorandum on FREYJA at the Eurosatory arms show in Paris in June, with the TRML-4D to play a key role, Hensoldt announced. Fire Point is set to act as prime contractor and hold design authority. Hensoldt is to produce, test, and deliver the radars.

Defense Express expects any study of deployment options to focus on how well the radar detects ballistic missiles and relays that data. Hensoldt has its own unit in Ukraine to work closely with operators, the outlet noted. Earlier, the company began setting up a local hub so Ukraine can service and repair the TRML-4D itself.

Already on duty

Ukraine's military uses the TRML-4D both standalone and as the built-in radar of the IRIS-T SLM medium-range air defense system, Defense Express noted. Hensoldt lists an instrumented range of 250 km (155 miles) at altitudes up to 30 km (19 miles). Defense Express, citing the manufacturer, gives track ranges of more than 120 km (75 miles) for fighter jets and more than 60 km (37 miles) for supersonic missiles.

More radars give earlier warning of ballistic strikes, but they cannot stop them. Until the FP-7.X makes its first ballistic intercept, planned for mid-2027, that job stays with Patriot and SAMP/T missiles. Partners delivered three times fewer air defense missiles in the first half of 2026 than a year earlier, Zelenskyy said on 5 August.

Ukrainian drugmakers could lose the certificates that let them sell in Uzbekistan, their most important export market, Ukrainian business outlet Ekonomichna Pravda reported on 7 October. Uzbekistan is ending remote factory inspections next year, and industry sources say its inspectors are wary of traveling to a country at war.

Russia's war keeps reshaping Central Asia's trade with both warring countries: Ukrainian refinery strikes pushed Russian fuel shortages into the region, and Kazakhstan gained leverage over a Russian retail giant.

A market worth a third of export earnings

Uzbekistan brings in about 30% of the Ukrainian drug industry's foreign-currency earnings, and one in 10 medicine packs sold there is Ukrainian, Ekonomichna Pravda wrote. By the outlet's count, at least three of Ukraine's five biggest drugmakers by revenue rank it as their top foreign market.

The currency from Uzbekistan lets manufacturers keep prices low in Ukraine and absorb losses from Russian strikes, three industry sources told Ekonomichna Pravda. Losing the market would force producers to raise domestic prices or pull low-margin medicines, which "will hit the Ukrainian patient," said Hennadii Vovk, former deputy head of Ukraine's State Service on Medicines and Drug Control.

Exports reached $114 million in January–June 2026, more than in all of 2021, said Yevheniia Piddubna, government relations head at Farmak, Ukraine's largest drugmaker. She said Uzbekistan takes 35% of Farmak's exports.

Data from the YouControl business registry, cited by the outlet, complicates that picture. In 2022, 30–35% of Farmak's products went to Uzbekistan. In 2025, Uzbekistan was not among its direct buyers. Farmak explained that wartime currency rules cap payment terms at 180 days, while foreign buyers often demand longer. So part of its trade runs through the group's Polish company.

Remote checks end, and inspectors hesitate to travel

Uzbekistan grants three-year certificates of good manufacturing practice (GMP) after inspecting the factory. Since the pandemic, it has allowed remote checks. That suited Ukraine, where Uzbek experts avoided traveling because of Russia's invasion, industry sources told the outlet. Remote inspections end on 1 January 2027.

Most Ukrainian certificates expire within a year. Farmak's runs out in November 2026, and the company may not manage to renew it in time. Three producers renewed under the old rules until 2029: Darnytsia, the Borshchahivskyi Chemical and Pharmaceutical Plant, and Farmex Group. According to Piddubna, Uzbekistan's regulator has drafted rules for remote inspections in force-majeure cases, but nothing has been put into practice. Industry sources said the Uzbek Presidential Administration must sign off.

Producers have asked the Office of the President, the Foreign Ministry, and the Health Ministry to raise the issue with Uzbekistan's government, but no Ukrainian experts have been sent there yet, the outlet reported. Russia, whose share of the Uzbek drug market is almost the same as Ukraine's, is ready to take Ukraine's place, its sources said.

Russia's jet-powered attack drones could eventually reach 800–900 km/h, and intercepting them will demand new piloting skills—so Ukraine has asked the makers of its interceptor drones to build simulators to train the crews, a senior Air Force officer told a parliamentary commission on 6 October, Suspilne reported.

Russia keeps modifying its jet Shaheds faster than Ukraine can field the drones meant to catch them, and Kyiv is now preparing crews for speeds its interceptors have never faced—a sign the air war is shifting from a contest of volume to one of raw speed.

The speed Russia hasn't reached yet

Colonel Yurii Cherevashenko, deputy commander of Ukraine's Air Force, told the commission that Russia's jet drones fly at around 600 km/h today but could eventually reach 800–900 km/h—speeds he said have not been recorded so far. That range sits near the cruising speed of a commercial airliner.

Intercepting such targets will take specific piloting skills, Cherevashenko said. When an interceptor and its target move at roughly the same speed, he noted, the pilot barely perceives the difference in their speeds. To train for that, Ukrainian interceptor-drone makers have been tasked with building simulators where crews can practice against high-speed targets.

Where Ukraine stands now

Ukraine already downs 85% to 90% of Russia's slower, propeller-driven drones, Ukrainian President Volodymyr Zelenskyy has said, but the jet models remain a tougher problem—Ukrainian interceptors scored their reportedly first kill of a jet-powered Shahed in November 2025. In a 28 September evening address, Zelenskyy put the jet-drone interception rate at about 57%, lower than required. Days later, he said Ukraine is testing five interceptor-drone models and could be producing about 400 of one of them by the end of October. Asked when jet-drone interceptors would arrive at the scale needed, Cherevashenko answered: "Not before the end of November."