The Saudi Pavilion at IDEX 2023, led by the General Authority for Military Industries (GAMI) and attended by key public and private sector players is showcasing the robust growth of Saudi Arabia’s defense sector. The Pavilion represents the Saudi Ministry of Interior (MoI), the Saudi Ministry of Investment (MISA), the World Defense Show (WDS), and other key private sector defense and security entities, sharing the inspiring story of the establishment of the Kingdom’s defense sector, which began in 1949 when King Abdulaziz bin Abdulrahman Al Saud issued a royal decree to establish defense factories.
Saudi Arabia has seen unprecedented growth in the defense sector, with each successive King working to enhance the country’s military and defense capabilities. GAMI has played a significant role in defense localization, incentivizing investment from local and international manufacturers, and empowering the Kingdom’s human capabilities.
With 100% foreign investment ownership now allowed, Saudi Arabia’s defense sector is becoming ever more attractive as the country positions itself as an ideal investment destination for defense industrialization ecosystem. The number of GAMI licensed companies soared by 78% in 2022 and reached 192 while 342 new establishment permits and military industrial licenses were also issued. These licenses are associated with a projected investment volume over the next 5 years of USD 11.47 billion as of end of 2022.
To build a sustainable local defense ecosystem under the guidance of Vision 2030, GAMI has announced several strategic initiatives. These include the supply chain program, which has identified more than 70 investment opportunities with an estimated total investment value of over USD 72 billion. To facilitate these opportunities, six defense and security areas or clusters have been identified, with 30 opportunities earmarked as priority opportunities. These priority opportunities account for nearly 80% of the total projected spend, amounting to USD 56 billion.
GAMI has also implemented a VAT of zero percent on locally manufactured defense goods supplied. This initiative is expected to increase localization by stimulating the manufacture of defense products, contributing significantly to securing the Kingdom’s national priorities, including military readiness and strategic autonomy.
The KSA Pavilion also highlights the Military Industries Human Capital strategy (MIHC), announced in February 2022, which aims to stimulate and enable the human capital ecosystem. The strategy focuses on the development of more than 800 skills required in the sector across 172 different job fields.
