A BBVA Research report on the potential of Türkiye’s defense industry said the weight of defense-related sectors in the Turkish economy had grown alongside increases in production and export capacity.
Türkiye’s defense exports reached $10 billion in 2025, according to the report. Approximately 176,700 people worked in defense-related fields, while the domestic share of missile and rocket munitions production exceeded 90%.
Europe faces production and stock replenishment gaps
The report said global demand for defense products had become more structural due to geopolitical tensions, rising military spending and changes in warfare technologies.
Europe has a strong defense industry infrastructure but faces significant bottlenecks in production volume and speed, as well as in replenishing stocks, the report said. Europe’s main capacity gaps include integrated air and missile defense, unmanned aerial vehicles and counter-UAV systems, loitering munitions, long-range firepower and munitions stocks.
Joint production option between Türkiye and Europe
The report emphasized that integrating defense capabilities between Türkiye and Europe would not, by itself, mean access to the European market. It said European Union procurement rules, particularly requirements concerning local content and design rights, imposed limitations on suppliers from outside the bloc.
For this reason, the report identified joint production, local assembly, joint ventures, integration into supply chains and technology transfer models acceptable to both sides among the most realistic ways for Türkiye to become more integrated into Europe’s defense industry.
Export markets are diversifying
Türkiye’s defense industry opportunities are not limited to Europe, according to the report. It said export markets were diversifying toward Africa, Asia and the Gulf countries.
The report said Türkiye’s competitiveness in the coming period would not depend solely on increasing production of existing platforms. It added that progress in advanced technology fields such as artificial intelligence, autonomous systems, cybersecurity and space would also be decisive for the sector’s competitiveness.
A complementary partner for Europe
The report said Europe needed defense capabilities that could be deployed on a broad scale and at speed and operate in the field. It assessed that Türkiye could be a complementary partner for Europe’s defense needs through its competitive platforms, flexible production capacity and experience in rapidly evolving areas of modern warfare.
The report projected that, if existing restrictions between Türkiye and Europe were managed effectively, defense cooperation could become one of the leading industrial and geopolitical opportunities of the next decade.