Overview

Australia is a leading market for the U.S. defense industry, ranking 3rd globally over the past decade (2016-2025) behind only Saudi Arabia and Japan, and 5th in the past five years (2021-2025) as Poland and Ukraine emerged as significant markets. This exceptional performance is driven by the close bilateral partnership and Australia’s focus on interoperability—and increasingly interchangeability—with the U.S. military.

The U.S. has supplied 65% of Australia’s major arms purchases over the past sixty years, 85% from 2021-2025, and 77% in 2025. Australia was the U.S.’s 2nd largest defense market annually from 2017-2020. This market overwhelmingly favors U.S. defense products, and U.S. companies should actively engage, exhibit capabilities, and partner with Australian industry as distributors, partners, and manufacturers. 

Historically, Australia has faced the challenge of defending an entire continent with a small population and industrial base. Supported by a strong export-driven economy, Australia has positioned itself as a major arms importer—initially from the United Kingdom, shifting to the United States in the late 1960s.

In 2026, Australia released updated versions of the National Defence Strategy (NDS) and Integrated Investment Plan (IIP), detailing where and when key expenditure is scheduled. These are essential references for companies considering the Australian market.

Key changes include:

• $10 billion additional over the next four years
• Nearly $40 billion additional over the next decade
• ~$300 billion investment through 2035-36 on capability development

Priority areas include undersea warfare, maritime capabilities for sea denial and localized sea control, amphibious combined arms land systems, expeditionary air operations, space and cyber, targeting and long-range strike, guided weapons and explosive ordnance, and missile defense.

Australia’s FY 2026-2027 defense budget is approximately $45 billion, positioning it around 17th globally in defense expenditure. Australia has adjusted its accounting to align with NATO methodology and is targeting 3% of GDP by 2033-34.  The Swedish SIPRI Institute confirms Australia’s strong profile as a leading defense importer from the U.S. and globally.  (See SIPRI arms trade database)

Australia purchases all defense systems without defense assistance. Most originate in the U.S., and Australia co-develops systems with the U.S. There are currently over 400 active Foreign Military Sales (FMS) cases valued more than $25 billion. Over the past three years, ten U.S. companies won defense projects with combined U.S. content valued at approximately $3 billion, supported by formal USG advocacy.

The Australian defense sector is dominated by U.S.-parented companies serving as prime contractors: Lockheed Martin, Boeing, Northrop Grumman, Raytheon/RTX, L3Harris, Leidos, Honeywell, General Dynamics, GE Aerospace, KBR, Bell Textron, and Huntington Ingalls. Recent arrivals include Anduril and Saronic as autonomous systems gain focus.

Australian defense companies, mostly SMEs, are frequently innovative but limited by market size. Many have expanded into over thirty U.S. states, enhancing U.S. capabilities and industrial output.

AUKUS Partnership

The Australia-UK-US (AUKUS) agreement (announced September 15, 2021) dramatically enhanced the trilateral defense relationship. AUKUS focuses on two streams:

• Pillar 1: Australia acquiring nuclear-powered, conventionally-armed submarines with input from all three partners, including enhanced Australian shipbuilding and sustainment capabilities
• Pillar 2: Accelerating capabilities in Artificial Intelligence, Cyber, Undersea Technologies, Hypersonics, Electronic Warfare, Quantum technologies, Innovation, and Information Sharing

AUKUS is the most dramatic development in Australian defense history, radically changing future spending and focus. Neither the U.S. nor U.K. had shared nuclear submarine technologies with any other country since their 1958 partnership. AUKUS is accurately described as a trilateral technology accelerator.

Australia is pursuing:

• Substantially increased total expenditure
• Acquisition of nuclear-powered submarines
• Interoperability and interchangeability with the U.S. military
• Skills transfer and in-country R&D, assembly, and manufacture
• Re-establishing naval shipbuilding industry
• Pursuit of international sales from Australian-produced systems

The maritime sector is the primary focus, involving nuclear-powered submarines under AUKUS with first vessels due in the 2030s, plus large investments in shipbuilding and maintenance infrastructure at Osborne (near Adelaide) and Henderson (near Perth). Australia recently entered a $7 billion agreement with Japan for eleven upgraded Mogami frigates—the first three built in Japan by Mitsubishi Heavy Industries, the latter eight at Henderson. First delivery is slated for December 2029.

Australia is determined to reverse defense industry capability decline and become a leading defense exporter. While not mandating specific Australian content requirements or offsets, Australia expects that everything that can be done in Australia should be done in Australia. Companies bidding on this basis will be viewed more favorably. Specific project opportunities are advertised via AusTender.

At the same time, regulatory reforms have included: ITAR licensing exemptions for defense trade between the U.S., Australia, and U.K. (ITAR 126.7); supplier qualification programs to help Australian suppliers meet U.S. nuclear-powered submarine standards and qualify for the U.S. Submarine Industrial Base (Virginia-class and SSN-AUKUS submarines); and $3 billion Australian contribution to strengthen the U.S. submarine industrial base; two substantial payments exceeding $1 billion made during 2025.

Australian defense expenditure aligns with territorial claims to the largest jurisdiction of any nation—10 million square miles (27.2 million square kilometers)—split almost evenly between land and ocean, stretching from the South Pole to just short of the Equator. Australia’s Search and Rescue Region (SRR) covers approximately 53 million square kilometers, nearly 11% of Earth’s surface.

Market Data

Total market size = (total local production + imports) - exports

Note: Imports from the U.S. are measured differently by U.S. and Australian sources. The U.S. provides most of Australia’s defense imports—85% for 2021-2025, including 77% in 2025. Definitional and confidentiality issues obscure accurate data. 

Leading Sub-sectors

The scale and specific areas of Australian defense acquisition are well-documented in the 2026 NDS and IIP (and 2024 versions). The IIP is the best reference for disaggregating and scheduling key acquisitions. International conflicts in Europe and the Middle East have demonstrated the effectiveness of new technologies and vulnerabilities. U.S. companies with leading-edge capabilities should note opportunities in:

• Drone and counter-drone technology
• Electronic warfare
• Long-range strike missiles and missile defense
• Sea mines and mine countermeasures
• Base and high-value asset protection
• Satellite communications

Opportunities

Major defense trade shows and specialized events held in Australia offer an ideal platform to showcase U.S. solutions. These include the following:

Indian Ocean Defence and Security 2026
Dates: May 26-28, 2026
Location: Perth, Western Australia

Indo Pacific Maritime is the premier industry event focusing on the needs of the Royal Australian Navy and also featuring a range of products and services aimed at commercial shipping and seaports. It is held every second year in Sydney and features a U.S. Pavilion. The 2022 event set a new record of 735 participating exhibitor companies in an Australian defense trade show and this year’s event is anticipated to be the first maritime defense trade show to break the 800 total. Given the strong AUKUS focus on nuclear-powered submarines and associated undersea technologies, as well as various other leading technologies, this event will also attract a record U.S. exhibitor contingent.

Land Forces 2026
Dates: October 6-8, 2026
Location: Perth, Western Australia

Land Forces is the premier industry event for pitching to the Australian Army, Special Forces, and law enforcement agencies. It features a U.S. Pavilion and in 2024 attracted a record 995 participating exhibitor companies, which is the current record exhibitor record for any defense trade event in Australia. Indeed, it almost certainly was the first Australian defense trade event to exceed 1,000 exhibitors as the U.S. Commercial Service identified an additional seventeen U.S. sub-exhibitors not the event listing, indicating a higher total of 1,012. Land Forces has changed venue in recent times as its continued expansion has attracted interest from around Australia. After being held in Brisbane in 2014, 2021 and 2022 and in Adelaide in 2016 and 2018, the event moved to Melbourne in 2024 to take advantage of its much larger convention center. Land Forces 2026 will move to Perth Western Australia in October 2026 and as at early May 2026 was already sold out five months prior to opening day. 

MILCIS 2026 
Dates: November 17-19, 2026
Location: Canberra, Australian Capital Territory

Organized annually by the Australian Department of Defence, MilCIS is the smallest of the major defense trade shows and conferences but its specialized nature re communications, IT, cyber, etc ensures that it attracts a strong exhibitor cohort including a large U.S. presence. Anticipate around 150 exhibitors and an excellent conference at each event, with exceptional access to defense personnel and a strong industry audience. Innovative U.S. companies should consider the opportunity not only to exhibit but also to present at the concurrent conference on their capabilities and relevance to Australian defense needs.

AVALON 2027
Dates: February 23 - 28, 2027
Location: Avalon Airport, Geelong VIC (about 35 miles south of Melbourne) 

Avalon Airshow is the largest airshow in the Southern Hemisphere and its trade expo and associated conferences and vies with Land Forces and Indo Pacific Maritime to attract the largest number of participating exhibitor companies at the three major defense trade shows held in Australia. It features a U.S. Pavilion, a large Showtime program of consultations with U.S. Exhibitors and a U.S. Investment Seminar. As of the past three events held in 2019, 2023 and 2025, Avalon now features the largest showcase of U.S. aerospace and defense capability at any event in the Indo Pacific, reflecting dramatic growth since 2015. The most recent airshows in 2023 and 2025 have collectively attracted 280+ U.S. exhibitors and 20 U.S. States, supported by four-day 1:1 Showtime counselling sessions and U.S. Investment Seminars featuring 18 U.S. State presentations and multiple Australian industry successes expanding into the U.S. 

Indo Pacific Maritime Expo
Dates: November 2-4, 2027
Location: Sydney NSW

The Indo Pacific International Maritime Exposition – commonly referred to as ‘Indo Pac’ or ‘Indo Pacific Maritime’ - is the premier industry event focusing on the needs of the Royal Australian Navy and also featuring a range of products and services aimed at commercial shipping and seaports. It is held every second year in Sydney and features a U.S. Pavilion. Indo Pacific Maritime 2025 was the most successful edition in the event’s history and particularly so from a U.S. perspective. It attracted 241 official delegations, including 32 Chiefs of Navy and 19 international naval representatives from around the world; and 28,000+ trade attendees.  The 2025 event also set a new record of 1019 participating exhibitor companies in an Australian defense trade show and included a record U.S. exhibitor contingent. 

Resources

Other websites that will be of interest include the following.
 

• Australian Department of Defence, Self-explanatory, the Australian Government department charged with coordinating the scoping, acquisition and use of military equipment.
• The AMDA Foundation – organizers of the three largest defense trade shows and conferences in Australia as well as the RotorTech helicopter and UAV trade show and conference and the regionally-focused Indian Ocean Defence and Security event held in Perth, Western Australia.
• U.S. Pavilion coordinator at Indo Pacific Maritime, Land Forces, and Avalon Airshow – Kallman Worldwide.  Kallman Worldwide is a New Jersey-based company that organizes U.S. Pavilions at various trade shows worldwide, particularly those of a defense nature. Kallman organizes three such pavilions at the abovenamed Australian events and supported IODS for the first time in 2024.
• U.S. Department of Commerce – The Advocacy Center - The Advocacy Center works with Posts to coordinate targeted support for U.S. companies that have been formally approved for assistance in the pursuit of major overseas project opportunities.