The Czech defence industry keeps growing at a rapid clip: last year, domestic manufacturers and arms dealers exported weapons, ammunition and other military goods worth more than 115 billion crowns, according to the Czech Ministry of Industry and Trade. That marks a one-fifth increase on the previous year, with exports now accounting for roughly 90% of all domestically produced arms.
According to Jiří Hynek, president of the Defence and Security Industry Association, Ukraine remains the main recipient of Czech weapons — about half of exports go there directly, with a further 20% or so arriving indirectly. Two-thirds of the exported military goods are large-calibre ammunition.
Pinning down the defence industry's exact share of Czech GDP is no easy task. Under the narrow methodology used by the Czech Statistical Office — which only counts the production of weapons, ammunition and military armoured vehicles — the sector's share stood at 0.45% in 2024, up from 0.11% in 2014 and 0.12% in 2019. That figure, however, leaves out military aircraft, electronics, optics, communications equipment and military software production.
Citing experts, the Ministry of Industry puts the sector's real share at around 1% of GDP. Analysts at EY arrived at a similar figure: according to their 2023 data, the industry generated €3 billion in revenue, also equivalent to about 1% of the country's GDP. The industry section of the Czech Chamber of Commerce puts the figure even higher, at 2–3% of GDP, though such calculations are complicated by the fact that some ammunition isn't manufactured by Czech firms from scratch — it's bought abroad and merely finished or modified domestically.
Despite its rapid growth, the arms industry remains far smaller than the automotive sector, whose share of Czech GDP reached almost 10% in 2025, according to the AutoSAP association. As the shift to electric vehicles — which require fewer components — continues, revenue at Czech auto-parts suppliers fell by 0.6% last year, to nearly 600 billion crowns.
As a result, some companies that once supplied carmakers are trying to pivot toward defence contracts. But the shift isn't easy: production for the arms industry tends to be far more fragmented and low-volume, and many products require special certification. "For some companies it makes sense, for others it doesn't anymore. A lot depends on what technology they have," notes Jiří Hynek.
Major defence companies pour hundreds of millions, even billions, of crowns into research and development every year. Czechoslovak Group, the country's largest defence group, spends about 2% of its annual revenue on R&D — more than €250 million over the past three years. Colt CZ Group, a maker of small arms and ammunition, spent 404 million crowns on development last year, roughly 1.8% of its revenue.
Smaller companies can hardly count on state support at all. Czechia has never met the informal commitment among European countries to spend 2% of total defence expenditure on defence research. This year the state will allocate less than 458 million crowns for the purpose — about 0.3% of the defence budget, compared with an EU average of roughly 4%, according to the European Defence Agency.
"This is a long-term strategic failure on the state's part. Companies have to fund innovation either commercially, driven by market demand, or through state support, which is essentially negligible," says Jaroslav Hanzal, director of the Association for Applied Research in IT. The Ministry of Industry, for its part, promises that state spending on defence R&D will gradually increase.
Source: seznamzpravy.cz