Ukraine is ramping up its defence capabilities with an investment of over $7bn in its domestic arms industry this year, according to Defence Minister Rustem Umerov.

The funds have provided "enormous support" to Ukraine’s military effort against Russia in the ongoing war, in filling gaps left by the shortfall in international technical assistance.

The US ran out of money for Ukraine at the start of the year, handing Russia a devastating window of opportunity in which nearly all of Ukraine’s non-nuclear power and heating infrastructure was destroyed.

The investment is being channelled into critical areas such as drones, robotics and electronic warfare systems. "These investments are already yielding tangible results on the battlefield," Umerov said on August 28 as cited by the Kyiv Independent.

Last month, Prime Minister Denys Shmyhal announced that Ukraine plans to increase its domestic weapons production sixfold this year, as the country seeks to enhance its self-reliance in the face of ongoing conflict. According to Strategic Industries Minister Oleksandr Kamyshin, Ukraine doubled its ammunition production for Nato-calibre artillery systems last year alone.

The initiative was launched last year at a conference hosted by Ukrainian President Volodymyr Zelenskiy, who promised to turn Ukraine into a “military production hub.” Since then, several Western partners have signed off on joint venture agreements and begun to build factories in Ukraine, led by Germany’s Rheinmetall.

Zelenskiy also highlighted Ukraine’s achievements in military production, revealing that the country had produced three times more equipment and weapons than in the first year of the war. This surge in production includes armoured vehicles and anti-tank missile systems.

Zelenksiy also this week introduced a new Ukrainian long-range missile-drone, the Palyanytsia, and announced during the Independence Day celebrations that Ukraine has developed and tested its first ballistic missile on August 27.

However, Zelenskiy emphasised that Ukraine’s ambition extends beyond traditional arms, aiming to become a global pioneer in unmanned systems.

"Almost 200 companies produced drones in Ukraine last year, up from just seven in 2022," Shmyhal said as cited by Al Jazeera, adding that drone production has increased 100-fold. Last year Ukraine launched a “million drones a year” programme to radically increase domestic production. This rapid expansion means that Ukraine is now producing 90% of the drones it uses, Zelenskiy confirmed during a recent meeting with the joint chiefs.

Earlier this year the Defence Ministry set up the Unmanned Systems Forces, which will integrate "special units" into the army, air force and navy. Zelenskiy promised "constant scaling of production" to ensure these forces remain well supplied. "Our task this year is not only to bolster our sky shield and Ukraine’s long-range capabilities to the fullest extent possible, but also to inflict maximum systemic losses on Russia," Zelenskiy said in February.

Ukraine plans to produce 1mn light drones and 11,000 medium- and long-range drones a year, the latter with a range of more than 1,000 km, according to Kamyshin.

Umerov, speaking to G7 representatives in Kyiv last December, confirmed that Ukraine had "established production" and a "financing plan" to achieve these ambitious targets.

The emphasis on unmanned systems is not merely a tactical innovation but a necessary response to Russia's conventional military advantages as the Armed Forces of Russia (AFR) continue to outgun Ukraine in terms of artillery by at least five to one. Days before his dismissal, former Commander-in-Chief Valerii Zaluzhny described unmanned systems as "almost the only tool" capable of breaking the stalemate in the stand-off at the time, countering Russia’s superiority in heavy equipment and personnel.

The low tech of First Person View (FPV) unmanned drones lends itself well to this production, as they can be assembled in small workshops with relatively untrained technicians. The simplicity of drones also makes them affordable in comparison to Russia’s hypersonic news Kinzhal missiles that cost about $10mn each to make.

Pieter Wezeman, senior researcher at the Stockholm International Peace Research Institute (SIPRI), told Al Jazeera that Ukraine’s drone production capabilities are grounded in its historical strengths. "After the fall of the USSR, [Ukraine] was one of few countries that had a functioning aircraft engine industry. They can use that knowledge to rebuild a missile or a drone production capacity. It’s not coming from nowhere," Wezeman said.

Ukraine's rapid expansion in drone production is already positioning it as a major player in the global market. Oleksiy Danilov, head of Ukraine’s National Defence and Security Council, claimed that Ukraine is already among the top three drone manufacturers worldwide.

Russia has also focused on expanding its drone production and has already adapted the Iranian-supplied Shahed drones, improving on their performance and lowering the cost of production. But Russia's plans to produce more than 32,000 drones annually by 2030 appear modest. Unable to keep pace with Ukraine's production, Russia has turned to Iran, agreeing to pay $1.75bn for 6,000 Shahed drones, according to information revealed by Ukrainian hackers.

Russia should increase the production of drones more than five-fold in the coming years, Russian Prime Minister Mikhail Mishustin said at a strategic meeting dedicated to new national projects on August 287.

"In the coming years, it is important for Russia to continue actively creating its own technical and production base. For example, by the end of the decade dozens of new technological chains are expected to be created in the chemical industry. In the field of composite materials – over 15 production facilities and 60 products. The production of drones should increase more than fivefold," the Prime Minister said.