The United States is investing directly in supply chain resilience and advanced manufacturing. The United Kingdom is accelerating its sovereign hypersonic capability. France is deepening defence ties with India, while India balances foreign procurement with domestic industrial ambition.

Across all cases, industrial capacity is no longer secondary to procurement. It is shaping it.

Market Activity

United States: Targeted Industrial Base Expansion

Rebuilding the Materials Backbone of US Defence

The United States continues to strengthen its Defense Industrial Base through focused investment in advanced manufacturing.

On 13 February, the Department of Defense confirmed a five-year contract valued at nearly $9.2 million to LIFT, the national advanced materials Manufacturing Innovation Institute. The contract addresses manufacturing challenges associated with ceramic matrix composites. The awards were formally made in September 2025, with announcement delayed due to the government shutdown.

The programme is funded through the Office of the Assistant Secretary of Defense for Industrial Base Policy’s Industrial Base Analysis and Sustainment programme. It supports advanced composites research, manufacturing scale-up and workforce development.

As stated in the official release:

“While composites have been used for decades, they’re relatively new to the centuries-old metallics manufacturing industry. Recent advancements in carbon-fiber technologies have impacted CMCs, which are known for their ability to withstand higher temperatures as compared to their polymer composite counterparts. This capability is currently being employed in technologies used in the production of commercial products and defense-critical systems such as stealth aircraft, jet engines, and hypersonic weapons.”

Since the IBAS programme began in 2014, the Innovation Capability and Modernization Office has invested over $2.6 billion across 206 projects to restore domestic manufacturing capacity.

Microelectronics and Display Supply Chains

On 12 February, the Department also confirmed $24.5 million in awards to Kopin Corporation and Tectus Corporation to strengthen the US supply chain for advanced MicroLED displays used in next-generation weapon systems.

Assistant Secretary of Defense for Industrial Base Policy Michael Cadenazzi stated:

“Microdisplays are crucial components in delivering information to the joint warfighter and are integrated into solutions across all domains including heads-up-displays for pilots, advanced night vision goggles, weapon optics, and unmanned systems. Securing a domestic supply of advanced MicroLED displays is vital for the Department’s next-generation defense applications, ensuring both performance and security.”

Both projects aim to establish an onshore, multi-vendor supply chain for state-of-the-art MicroLED displays. The technology enables daylight-readable, full-colour symbology at ultra-high brightness levels, while maintaining low-light performance and reducing size, weight and power.

These awards reinforce the Department’s priority to secure critical upstream manufacturing capability. Taken together, composites and microelectronics illustrate the same strategic direction. The focus is not simply on procurement of finished platforms, but on securing upstream manufacturing capability in critical materials and components.

Onshore capabilities are no longer support functions but central pillars of the US defence procurement strategy.

France and India: Capability Gaps and Strategic Alignment

French President Emmanuel Macron’s visit to India is expected to advance multiple defence discussions, including additional Rafale aircraft, helicopter cooperation and missile production. While not all discussions are confirmed contracts, Rafale numbers and helicopter arrangements remain key areas to watch.

Indian officials cleared a proposed $39 billion defence equipment package ahead of the visit, including approval covering 114 Rafale aircraft. The scale of the clearance signals urgency in stabilising force structure, not just long-term industrial planning.

Talks reportedly included potential domestic production of the HAMMER missile and induction of H125 helicopter production facilities.

Progress under Make in India has been uneven, particularly in advanced aerospace development. Indigenous next-generation aircraft programmes have experienced delays, placing pressure on operational squadron strength. As older aircraft retire, the gap between required and available squadrons continues to widen.

Licensed production and local assembly are becoming practical bridges while indigenous capability matures. The Sukhoi HAL structure remains an important template, combining foreign design with domestic industrial participation.

For foreign suppliers, this creates structured opportunity. For India, it sharpens the trade-off between sovereign ambition and immediate operational readiness.

Visiongain Insight: India’s procurement stance reflects a widening gap between industrial ambition and operational timelines. While sovereign aerospace capability remains a long-term goal, squadron pressures are increasing reliance on licensed production and foreign platforms with domestic assembly. For suppliers, opportunity lies in partnerships that combine platform delivery with credible industrial participation. Execution and production reliability will determine which relationships endure.

United Kingdom: Hypersonics and Sovereign Capability

The United Kingdom has announced a £12 million investment in hypersonic missile development awarded to Amentum UK, based in Warrington.

Supported by Ebeni and Synthetik Applied Technologies, the consortium will provide engineering expertise to develop a hypersonic system design. The system will be demonstrated through flight testing before adaptation into prototype missiles capable of operating at extreme speeds and temperatures.

The Strategic Defence Review identified hypersonics as a priority for modern warfighting. The programme contributes to the MOD’s ambition to field a sovereign long-range, high-speed Hypersonic Strike Capability by the end of the decade. It also strengthens the UK’s contribution to NATO deterrence.

Since July 2024, 124 suppliers have been awarded 22 contracts across the hypersonics programme, with over 50 per cent flowing to SMEs. The total value of contracts awarded since that period stands at £48 million.

Amentum and its subcontractors will operate as part of Team Hypersonics, established to deliver a demonstrator system before transition towards operational deployment.

The model combines sovereign ambition with broad industrial participation, particularly among smaller firms.

Visiongain Insight: The UK is positioning hypersonics as both a capability priority and an industrial strategy instrument. Early-stage awards are building technical depth and SME integration. Long-term advantage will depend on sustained funding and credible conversion from demonstrator to deployable system.

Market Outlook

The defence market remains structurally robust and is likely to remain so over the coming decade. Growth, however, is no longer defined by demand alone. Industrial capacity, supply chain resilience and production readiness are becoming decisive constraints.

The political West continues to generate sustained opportunity, while India represents both scale potential and execution complexity. Licensed production and local assembly are becoming standard features of major procurements. Fully indigenous development of advanced aerospace systems remains confined to a limited number of states.

Competitive advantage will depend less on ambition and more on the ability to manufacture at scale, manage timelines and convert policy into delivered capability.

Visiongain Insight: The next phase of defence growth will favour suppliers that can align industrial capacity with geopolitical alignment. Market access is widening, but execution discipline and manufacturing credibility will determine who captures long-term value.

Related Visiongain Market Reports

Visiongain market reports provide the detailed data and forward-looking insight needed to evaluate funding priorities, capability development, and execution risk in defence markets. Research is evidence-based and analyst-led, supporting informed decision-making across procurement, industrial planning, and long-term strategy.

• Undersea Defence Infrastructure & Security Market Report 2026-2036
• Hypersonic Missile Defence Systems Market Report 2026-2036
• Military Simulation, Modelling and Virtual Training Market Report 2026-2036
• Advanced Materials in Aerospace and Defence Market Report 2026-2036
• U.S. DoD & Space Force Budget Market Report 2026-2036
• Supersonic and Hypersonic Missiles Market Report 2025-2035

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