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Following the collapse of the Soviet Union, Russia’s defense industry fell into disrepair. However, the 2000s saw a shift, with the Kremlin beginning to revive its military-industrial base. Now, as Moscow seeks to keep its war effort going, a key question arises: can Russia maintain the flow of weapons and equipment to its military under the weight of Western sanctions, growing technological isolation, and shrinking resources?
Read more about this in the article by Bohdan Popov, Head of Digital at the United Ukraine Think Tank, communications specialist and public figure for The Gaze.
Firstly, Popov emphasizes that the collapse of the Soviet Union triggered a steep decline in Russia’s defense industry. Once a vast network of factories employing millions, it deteriorated rapidly. During the 1990s, government funding plummeted—from over $250 billion in 1990 to just $15.7 billion by 1998 (adjusted for inflation).
Weapons development came to a halt, research institutions were shut down, and tens of thousands of experts lost their jobs. Efforts to shift production toward civilian markets largely failed, as the industry struggled to adapt to a market-based economy. Many defense enterprises managed to survive only due to the remnants of the Soviet system and continued arms sales to countries like China, India, as well as in the Middle East and Africa.
Secondly, the expert argues that Russia’s defense sector has seen rapid financial growth. In 2023, defense spending surpassed 6% of GDP, and by 2025 it is expected to reach nearly 8%, or around $172 billion—double the amount spent in 2019. Alongside this surge in funding, the structure of the industry has also undergone major changes.
Following the full-scale invasion of Ukraine in February 2022, Russia’s defense industry effectively entered a wartime economy. Within months, the Kremlin implemented sweeping measures to prioritize military production: enterprises were legally obligated to fulfill state contracts under threat of criminal penalties, competitive bidding was eliminated, and defense factories adopted continuous operations with three shifts and six-day work weeks. According to RUSI, the defense sector may employ up to 4.5 million people by 2025—a substantial portion of Russia’s working-age population.
China has also become a crucial partner in sustaining Russia’s military production. As reported by Carnegie Politics, China exports over $300 million worth of dual-use goods to Russia monthly. While this figure is down from a peak of over $600 million in December 2023, China remains Russia’s top supplier of critical components for weapons manufacturing—including missiles, drones, and tanks. Many of these goods, such as microelectronics, machine tools, radar systems, and sensors, are items that Russia cannot produce on its own.
Thirdly, Bohdan Popov states that one of the key successes of Russia’s wartime economy in recent years has been the sharp expansion of arms production. Despite facing sanctions, technological constraints, and a shortage of qualified workers, the Russian defense industry continues to supply the military with a broad range of weaponry—from tanks and artillery to drones and precision-guided munitions.
Accurately measuring production output remains difficult, as the Russian government routinely hides crucial data, with many statistics classified or selectively released. Still, intelligence from Western agencies and independent analysts offers a general picture. In 2024, Russia is estimated to have produced around 4.5 million artillery shells—roughly ten times the amount manufactured in 2021.
Finally, the author summarizes that in this context, Russia’s growing military spending appears aimed at compensating for shortcomings not through efficiency, but sheer scale. Roughly half of the defense budget goes to personnel expenses—salaries, mobilization payments, and compensation to families—while the other half is directed toward equipment procurement and sustaining production. However, even these substantial sums often fall short of actual needs. Although defense companies are seeing increased revenues, their costs are rising even faster. At the Kurgan Machine-Building Plant, for instance, production costs rose by 45% in 2023, outpacing a 41% growth in revenue.
This imbalance is already creating structural vulnerabilities: weapons are becoming more expensive, losses are mounting, and output remains constrained. In a prolonged war, the Russian military is burning through resources faster than the defense sector can replenish them—and that gap is widening.
As a result, Russia retains the ability to continue fighting, but only by depleting its reserves, lowering the quality of its weaponry, and accelerating both technical decline and economic fatigue.
Read the full article by Bohdan Popov on The Gaze: Steel Without Silicon: Can Russia’s Defense Industry Survive Modern War?
Read also: Why Has Russia Lost Its Superpower Status?
