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Israel, Germany sign $3.1 billion contract expansion for Arrow air defence system

Published by Global Banking & Finance Review

Posted on December 18, 2025

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· Last updated: January 20, 2026

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Israel, Germany sign $3.1 billion contract expansion for Arrow air defence system
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Dec 18 (Reuters) - Israel and Germany signed a contract worth around $3.1 billion to expand the Arrow-3 air and missile defence system manufactured by Israeli aerospace industries, Israel's defence

Israel and Germany Expand Arrow Air Defence System with New Deal

Dec ‌18 (Reuters) - Israel and Germany signed a ‍contract ‌worth around $3.1 billion to expand the Arrow-3 ⁠air and missile ‌defence system manufactured by Israel Aerospace Industries, Israel's defence ministry said on Thursday.

Germany first ⁠purchased the Arrow system in 2023, as it sees ​Russia's intermediate-range missiles as the ‌primary threat to its ⁠population and critical infrastructure.

"Combined, the two agreements total approximately $6.7 billion, representing the ​largest defence export deal in Israel’s history," the ministry said.

Germany in December became the first European nation to deploy ​the ‍Arrow air defence ​system, built to intercept intermediate-range ballistic missiles such as Russia's Oreshnik, as it seeks to counter what it views as a growing threat from Moscow.

The system, ⁠developed by IAI in cooperation with the U.S. Missile Defence ​Agency, is used as the upper layer of Israel's missile defences, together with the Iron Dome, which ‌takes out short-range threats.

(Reporting by Yomna Ehab and Enas Alashray; Editing by Susan Fenton)

Key Takeaways

  • Israel and Germany sign a $3.1 billion contract for Arrow air defence.
  • The deal is part of a $6.7 billion defence export agreement.
  • Germany is the first European nation to deploy the Arrow system.
  • The system counters intermediate-range ballistic missile threats.
  • Developed by IAI with the U.S. Missile Defence Agency.

Frequently Asked Questions

What is the Arrow air defense system?
The Arrow air defense system is a missile defense system developed by Israel Aerospace Industries, designed to intercept and destroy incoming ballistic missiles.
What are ballistic missiles?
Ballistic missiles are weapons that deliver explosive payloads over long distances, following a ballistic trajectory, typically used in military applications.
What is military technology?
Military technology refers to the equipment, systems, and processes used by armed forces to enhance their capabilities in warfare and defense.

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