UAE defence free zone to accelerate local manufacturing

• Aims to attract global companies
• Expand domestic production
• Aligns with ‘Operation 300bn’

The UAE plans to develop a defence-focused industrial free zone in Abu Dhabi as it steps up efforts to localise military manufacturing following the Iran conflict.

The Al Selmiyyah Defence Industrial Free Zone will be built by Tawazun Council and AD Ports Group, with the aim of attracting global defence companies to establish operations in the country.

The project is intended to expand domestic production capacity and reduce reliance on imports, as Gulf states reassess supply chains and defence readiness.

Under the partnership, Tawazun will oversee regulation, licensing and compliance, while AD Ports will lead master planning, infrastructure and land use, according to a report by Wam, the UAE state-run news agency. 

Investment details and a timeline for completion were not provided.

The push follows a costly regional escalation that began on February 28 and paused under a ceasefire on April 8. 

While there is no official tally, Gulf states are estimated to have spent tens of billions of dollars responding to sustained Iranian missile and drone attacks.

The UAE alone has engaged 549 ballistic missiles, 29 cruise missiles and 2,260 unmanned aerial vehicles, according to official figures, with interceptions occurring again this week.

Patriot interceptors, manufactured by Lockheed Martin, cost between $4 million and $5 million per shot, with two typically fired per incoming missile, according to Kelly Grieco, a senior fellow at the Stimson Center, a US foreign affairs think tank. On that basis, intercepting ballistic missiles alone could have cost almost $5 billion.

The new free zone also aligns with the UAE’s broader industrial strategy, Operation 300bn, which aims to more than double the sector’s contribution to GDP to AED300 billion by 2031.

Further reading:

• Gulf defence spending expected to rise by 20%
• UAE announces $49bn industrial localisation drive
• Abu Dhabi’s BlueFive plans $3bn investment in defence companies

“The war reinforces Gulf interest in strategic autonomy,” Kristian Patrick Alexander, a senior fellow at Abu Dhabi-based think tank the Rabdan Security and Defence Institute, said.

Gulf countries may need to up defence spending by as much as 20 percent during the next three years, according to industry experts, reflecting the scale of restocking required as a result of the Iran conflict and a wider shift towards sustained military readiness.