JNS.org – The Israeli Defense Ministry’s announcement on Jan. 7 of two major contracts with Israeli defense contractor Elbit Systems, valued jointly at approximately NIS 1 billion, constitutes one of the strongest signals yet that Israel is decreasing its reliance on defense imports wherever it can.

The agreements, signed by Defense Ministry Director General Maj. Gen. (res.) Eyal Zamir and Elbit Systems President & CEO Bezhalel (“Butzi”) Machlis, are aimed at leveraging domestic Israeli industry to boost the IDF’s operational independence and force buildup capabilities.

This strategic initiative marks a critical shift as part of Israel’s Blue and White Independence Program, which seeks to reduce reliance on foreign suppliers while boosting local manufacturing capabilities, according to a Defense Ministry statement.

The first agreement, led by the Defense Procurement Directorate (DPD), involves the production of thousands of heavy air munitions for the IDF. The second agreement, overseen by the Planning Department and the Directorate of Defense Research & Development (DDR&D), entails the establishment of a national raw materials plant. This facility will feature advanced production lines for materials critical to  the manufacturing of weapons, which were previously sourced primarily from abroad.

According to Zamir, these agreements will ensure an Israeli sovereign ability to make bombs and munitions “of all types,” adding,  “This is a central lesson from the war that will enable the IDF to continue operating powerfully in all theaters.”

The Nagel Commission report

The necessity for domestic production was also highlighted by the Nagel Commission, which was set up to examine how the IDF could better build up its forces after the Oct. 7 mass terror attack. The commission, headed by the former head of Israel’s National Security Council Brig. Gen. Prof. Jacob Nagel, submitted a report to the government on Jan. 6 highlighting the vulnerabilities exposed during the current conflict with Hamas and Hezbollah, including heavy reliance on imports for critical defense materials.

The report stated: “The war significantly challenged many long-held assumptions regarding dependence on imports (mainly from the United States, but not only). [Munition] consumption rates outpaced local production, and imports (of both products and raw material) couldn’t keep up for a range of reasons, mainly: the global arms race (especially the Russia-Ukraine war) and a higher bar for exports to Israel, due to political decisions, public pressure, and the interests of [international] decision-makers.”

The report elsewhere noted that incidents “like an embargo, a shortage in various types of weapons (especially land and air munitions), and fierce global competition over every available resource” mean Israel must become more independent when it comes to arms.

The report recommended an aggressive push for self-reliance in defense manufacturing, emphasizing hybrid strategies to maintain rapid access to critical munitions and raw materials. It called for the creation of a robust Israeli Defense Industrial Base (DIB) that integrates both civilian and military manufacturing capabilities.

An old-new approach

Israel’s pivot toward domestic defense production is not a new concept. Historically, the country began focusing on self-sufficiency after France’s 1967 arms embargo. However, the scale and urgency of the current shift are unprecedented, driven by global uncertainties and heightened Israeli military demands on multiple fronts.

Defense officials have stated in recent months that achieving a higher level of defense production autonomy allows Israel to choose its partnerships and take part in valuable strategic alliances—especially with Washington—from a position of strength, rather than dependency.

The Blue and White Independence Program was initiated in the fallout of the Oct. 7, 2023 attacks, when Israel found itself needing to receive hundreds of American cargo aircraft carrying ammunition, as well as resupply ships.

Alongside a focus on manufacturing, the program also prioritizes research and development of dual-purpose technologies that benefit both civilian and military applications. Examples include advanced laser systems like Rafael’s Iron Beam and quantum technologies for secure communications and rapid intelligence processing.

Challenges and benefits

The agreements with Elbit Systems are expected to provide highly significant operational benefits to the IDF.  For example, the heavy air munitions deal will enhance Israel’s ability to sustain operations across multiple theaters, such as in Gaza and Lebanon, as well as to deal with threats from Iran.

Meanwhile, the new raw materials plant will reduce vulnerabilities in the supply chain, ensuring a steady flow of critical components.

However, challenges remain. Israel’s dependence on U.S. Foreign Military Financing (FMF) casts a shadow on broader self-sufficiency, as FMF funds must be spent on American-made equipment. Additionally, scaling up domestic production requires significant government investments in infrastructure, automation and workforce training.

The agreements also have broader implications for Israel’s economy. By expanding local production lines and fostering innovation, the defense sector will create jobs and stimulate economic growth.

Machlis, Elbit’s president, noted this during the Jan. 7 signing with the Defense Ministry, stating, “This partnership contributes not only to security, but also to economic development and employment, creating livelihoods for thousands of households in Israel.”

At least one lesson from the past year and a half of war appears to have resulted in consensus among the Israeli defense establishment: Israel can never again afford to have only a small stockpile of weapons at its disposal, at any time.

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