Ukraine now builds far more weapons than it can afford to buy. A year ago, it promised to sell the surplus abroad and turn the proceeds back into its own army. However, 12 months later, that promise has barely materialized: a state fee of up to 30% is pricing Ukrainian arms out of foreign markets, and no one can say how much the army has actually gained, said Ihor Fedirko, executive director of the Ukrainian Council of Armorers.

President Volodymyr Zelenskyy announced the resumption of controlled weapons exports in October 2025, resting it on four promises: 1) sell what Ukraine makes beyond its own needs, 2) channel part of the proceeds into a special fund for the army, 3) open export offices in Europe and the US, and 4) establish joint ventures abroad.

The surplus is real: Ukraine's defense output is projected to reach $55 billion in 2026, far beyond what the state can finance. A year on, Fedirko checked each promise in turn.

1) Export of surpluses: rules that strangle businesses

On 1 July 2026, the government approved rules for controlled arms exports. They shortened the maximum application review period from 90 to 30 days, but also introduced an export fee: 20% for finished products and technologies, and 30% for components. For finished products exported under the special procedure, the contract value must be at least $334,000.

In September, the Ukrainian Council of Armorers, together with other associations, proposed a zero rate, no advance collection of the fee, refunds for deals that fall through, and simplified test shipments. The industry was promised that its amendments would be taken into account and that the resolution would be rewritten.

Even in early October, however, the rules still needed work. According to Fedirko, the new mechanism has effectively not started working. Whether it can bring in additional funds for defense depends on how acceptable the export terms are to manufacturers.

Fedirko says, though, that judging by current decisions, the state intends to keep the export fee.

“The industry is ready to discuss its contribution to defense financing. But the rate must be economically justified,” he says.

2) Procurement for the Ukrainian military: balance is only being established

He adds that the Ukrainian Council of Armorers intends to push for a rate significantly lower than 20%, one that would let companies fulfill contracts and invest in production.

With such high rates, Fedirko says, the competitiveness of Ukrainian weapons on foreign markets is in question, as is the ability to send even small test batches to potential buyers.

“The fundamental requirement is post-payment: after the contract has actually been fulfilled and the manufacturer has been paid. A company should not pay the state in advance a share of income it has not yet received,” he says.

He added that, given all this, the real export figures remain unclear, as does how much exports have actually brought the military.

“The military and manufacturers must feel the benefit of exports. I sincerely hope that next year will bring much better results,” he says.

In addition, on 12 October, the Ukrainian Parliament passed bill No. 15400 in the first reading. It provides for crediting the export fee to a special fund directed to the Ministry of Defense: 50% for the procurement, modernization, and repair of weapons and equipment, and 50% for the pay of Armed Forces personnel.

The bill has not yet been adopted, but Fedirko says he expects “final adoption and launch of the mechanism.”

3) Export offices: offices in Germany and Denmark

On 3 November, the Ukrainian government named the first cities for export offices: Berlin and Copenhagen. On 15 December, it again spoke of preparing an office in Berlin. In reality, Fedirko says he does not know the office’s status, and it likewise remains unclear how companies can apply to it and how many contracts it has helped close.

4) Joint ventures abroad: There are concrete results in this area

According to Fedirko, eight joint ventures have been created, five of which are already supplying products to Ukraine. He stresses that this is the result of work by Ukrainian companies, foreign partners and the state, and that it deserves recognition.

As early as February 2026, the authorities spoke of plans to create ten joint ventures in Europe within a year. At the same time, they announced Quantum Frontline Industries in Germany, with a planned annual capacity of 10,000 drones for Kyiv.

Beyond the number of ventures and deliveries, however, it is important to understand how other manufacturers can join the Build with Ukraine program.

“Who accepts applications, by what criteria are decisions made, and what support does a company receive?” Fedirko asks.

In other words, joint ventures are already delivering results, but the rules of participation and the state support mechanism must be clear to companies that want to develop production abroad.

National Guard commander Major General Oleksandr Pivnenko signed a follow-on contract with Quantum Frontline Industries managing director Matthias Lehna and Frontline Robotics chief technology officer and co-founder Pavlo Kosolapkin to build two Ukrainian drones in Germany, Quantum Systems said on 5 October. The deal covers the Linza strike drone and the Zoom reconnaissance drone, exceeds the volume of the 2026 agreement, and schedules delivery for 2027.

The order scales up a line that is already running. Quantum Frontline Industries' first production year remains on track for completion in 2026, it has already delivered its first drones to Ukraine's Defense Forces, and it is now preparing to increase production capacity fivefold for next year, Quantum Systems said.

German plants, Ukrainian designs

Quantum Frontline Industries is a German-Ukrainian joint venture of Frontline Robotics and Quantum Systems. Both the Linza and the Zoom come from Frontline Robotics, and the systems are manufactured in Germany for Ukraine.

Linza 3.0 carries up to 4 kg of payload out to 15 km and stays aloft up to 60 minutes, and it is already in service with more than 60 Ukrainian units, Frontline Robotics has said. Zoom 3.0 detects targets, fixes their coordinates, and corrects fire under active Russian jamming, the company told Militarnyi. It loiters for up to an hour and works at a tactical radius of up to 20 km. AI-driven navigation and autonomous operation over the target keep its data flowing even when standard radio links break down.

From ramp-up to serial production

Quantum Frontline Industries said the contract moves it from initial production ramp-up toward sustained, high-volume manufacturing. Kosolapkin told Militarnyi the firm keeps refining Linza and Zoom on feedback from Ukrainian troops, whose needs drive how the systems evolve, and that producing in Germany gives it extra capacity to scale Ukraine-proven designs and deliver them in larger volumes.