Overview
The General Authority for Military Industries is Saudi Arabia’s regulatory and development body for the defence and security sectors, established in 2017 as part of Vision 2030’s strategic objective to localise military spending and build a self-sustaining domestic defence industrial base. GAMI operates under a mandate that is simultaneously regulatory, developmental, and commercial: it licenses defence companies, regulates the sector, develops industrial strategy, and promotes Saudi Arabia as both a defence manufacturing destination and an arms export market participant.
Saudi Arabia is one of the world’s largest military spenders, with an annual defence budget that has historically ranged between $50 billion and $80 billion, placing the Kingdom among the top five or six global defence spenders. However, prior to GAMI’s establishment, approximately 98 percent of military procurement was sourced from international suppliers, with domestic industry limited to maintenance, repair, and overhaul activities and small-scale ammunition production. The economic logic of localisation is compelling: redirecting even a fraction of this spending toward domestic manufacturers could create tens of thousands of high-skilled jobs and anchor entirely new industrial clusters in the Saudi economy.
Governance and Mandate
GAMI is chaired by Crown Prince Mohammed bin Salman in his capacity as Minister of Defence, reflecting the strategic priority the Kingdom assigns to defence industrialisation. The Authority reports to the Council of Economic and Development Affairs and operates with a mandate spanning four core functions: sector regulation and licensing, industrial development and localisation, research and technology development, and export promotion.
The regulatory function encompasses the licensing of defence companies, the establishment of technical standards, quality management requirements, and offset programme management. GAMI has issued defence manufacturing licences to a growing number of domestic companies and joint ventures, creating the legal and institutional framework for a sector that effectively did not exist at commercial scale before 2017.
Localisation Strategy
GAMI’s centrepiece target is the localisation of 50 percent of military spending by 2030. This target encompasses the full spectrum of defence requirements: weapons systems, munitions, military vehicles, naval vessels, unmanned systems, electronic warfare equipment, cybersecurity solutions, command and control systems, maintenance and sustainment, and training and simulation.
The localisation strategy operates through multiple mechanisms. Direct manufacturing establishes Saudi-based production of defence equipment, either through wholly Saudi-owned companies or through joint ventures with international defence primes. Saudi Arabian Military Industries (SAMI), a PIF portfolio company, serves as the national champion entity, with subsidiaries and partnerships spanning aerospace, land systems, weapons and missiles, and defence electronics. SAMI’s partnerships with major international firms have established manufacturing and assembly operations for military vehicles, munitions, and electronic systems within the Kingdom.
Technology transfer agreements attached to major procurement contracts require international suppliers to establish manufacturing facilities, transfer technical knowledge, and develop Saudi workforce capabilities as a condition of winning contracts. This approach mirrors the offset and localisation programmes employed by other defence-industrialising nations including the UAE, India, Turkey, and South Korea.
Industrial Ecosystem
GAMI has overseen the development of an expanding defence industrial ecosystem. Beyond SAMI, the sector includes Advanced Electronics Company (AEC), which produces military communications and electronic warfare systems; Intra Defence Technologies, focused on armoured vehicles; and a growing number of small and medium enterprises supplying components, services, and specialised capabilities into defence supply chains.
The establishment of defence-dedicated industrial zones and the integration of defence manufacturing into broader industrial city developments provide physical infrastructure for the sector. The King Abdulaziz City for Science and Technology (KACST) and university-affiliated research centres contribute research and development capacity, though the technology maturation cycle for defence systems typically requires decades rather than years.
Human Capital Development
Building a defence industrial workforce is among GAMI’s most challenging objectives. Defence manufacturing and engineering require deep domain expertise in metallurgy, propulsion, avionics, software engineering, systems integration, and quality assurance disciplines that cannot be created through short-term training programmes. GAMI has partnered with international defence companies to establish training academies, sponsored Saudi engineers and technicians for placements at overseas defence facilities, and worked with Saudi universities to develop defence-relevant engineering and computer science curricula.
The sector’s workforce development timeline creates a tension with the 2030 localisation target. While assembly, maintenance, and lower-tier manufacturing roles can be filled relatively quickly, the design engineering and systems integration capabilities that represent the highest value-added activities in defence manufacturing require generational investment in human capital.
Export Ambitions
GAMI’s mandate extends beyond import substitution to the development of Saudi Arabia as a defence exporter. The Kingdom’s strategic relationships across the Arab world, Africa, and South Asia provide potential export markets for Saudi-manufactured military equipment, and GAMI has participated in international defence exhibitions to promote Saudi defence industry capabilities.
The World Defense Show, a biennial defence exhibition held in Riyadh and organised by GAMI, has established itself as a significant event on the global defence industry calendar, attracting participation from major international defence companies and providing a platform for Saudi industry to demonstrate its expanding capabilities to potential customers and partners.
Challenges and Risk Factors
The defence localisation programme faces structural challenges including the technology gap between Saudi industry and established defence manufacturing nations, the long development cycles for major weapons systems, the capital intensity of establishing production facilities for complex equipment, and competition for engineering talent with other Vision 2030 priority sectors. Geopolitical considerations, including arms export restrictions imposed by some supplier nations and the reputational complexities associated with the Kingdom’s military operations, add external dimensions to GAMI’s operating environment.
Outlook
GAMI’s trajectory through 2030 will determine whether Saudi Arabia can convert its position as a major defence importer into a self-sustaining defence industrial capability. The 50 percent localisation target is ambitious by international standards, and achieving it will require sustained investment, patience with technology maturation timelines, and continued partnerships with international defence primes. If successful, the defence industrial base would represent one of Vision 2030’s most strategically significant accomplishments: the creation of a high-technology industrial sector that simultaneously enhances national security, creates high-skilled employment, reduces foreign exchange outflows, and generates export revenue.