Israel to invest $110B in arms industry to cut reliance on US, allies

Washington provided $3.3B to Israel in military funding and $500 million in missile defence cooperation in 2025.

Dec 24, 2025

Washington provided $3.3 billion to Israel in military funding. / Reuters

Prime Minister Benjamin Netanyahu has said that Israel would invest $110 billion over the next decade to develop its own “independent” arms industry.

Much of the military equipment used by Israel comes from the United States because of the longstanding defence cooperation deal between the key allies.

The country's military resources have been strained in the last two years, with some nations ceasing arms sales to Israel in protest of its genocide in Gaza.

"I approved a total of 350 billion shekels over the coming decade to build an independent arms industry for the State of Israel," Netanyahu told a military ceremony at an air base in southern Israel on Wednesday.

"We want to reduce our dependence on any party, even on friends. The finest minds in our defence industries are hard at work developing weapons systems that will guarantee Israel's advantage on the battlefield of the future."

According to the US Congress, Washington provided $3.3 billion to Israel in military funding and $500 million in missile defence cooperation in 2025.

Shift from foreign suppliers

But Israel's leaders have indicated their intention to shift away from foreign suppliers.

In a controversial speech in September, Netanyahu said Israel was becoming increasingly isolated and had to adopt a "super-Sparta" approach.

Following a backlash over the remark, the Israeli leader later clarified that he was referring to the defence industry and that the country needed to become more self-reliant to avoid potential supply bottlenecks.

In his speech, Netanyahu said developing the country's arms industry would boost its security.

"We have established our status as a regional power and, in certain fields, as a global one. This brings many other countries closer to us. Peace is made with the strong, not with the weak," he said.

In 2026, Israel will allocate about 16 percent of its public budget to defence, around $35 billion out of an overall budget of $208 billion, according to government data.

Before October 2023, the country's defence budget was around $20.4 billion.