Turkey’s Undersecretariat for Defense Industries (SSM) is preparing a new Industrialization Directive that reflects the country’s growing maturity in the defense sector and the experience gained over years of complex procurement projects. The upcoming directive aims to more effectively support the national defense industry—especially small and medium-sized enterprises (SMEs) and subcontractors—by strengthening local production capabilities and modernizing industrial participation mechanisms.

Offset programs, once viewed primarily as foreign currency–generating tools, have evolved into powerful strategic instruments that help nations acquire new technological capabilities and expand their export potential. Today, the value of an offset program is not only measured by its size but by how it transforms local industry, increases domestic contribution and accelerates technological growth. With this shift in global defense dynamics, Turkey’s new Industrialization Directive places offset utilization at the center of its strategy for enhancing national capabilities.

Offset principles in Turkey were first established through the 1991 Handbook and subsequently refined through the 2000, 2003 and 2007 directives. The most recent update came in 2011 with the Industrial Participation/Offset Directive, which introduced a requirement for a 70% industry participation/offset commitment in major defense contracts managed by SSM. This change significantly increased local industry involvement, encouraged the use of domestic subcontractors and strengthened SME integration into large-scale defense programs.

As global defense technologies advance rapidly, the need for continuous modernization within Turkey’s defense ecosystem has become increasingly critical. Current offset policies and contractual mechanisms are undergoing revision to improve their effectiveness, adaptability and long-term sustainability. These updates aim to diversify offset models, enhance localization targets and deepen the domestic supply chain.

The new Industrialization Directive, currently being developed by SSM’s Industrialization Department, incorporates industry feedback and reflects the sector’s present level of development. The directive is expected to include new mechanisms to support SMEs, incentives to boost localization rates, and measures to facilitate more robust collaboration between prime contractors and domestic suppliers. Once finalized and implemented later this year, the directive will help strengthen Turkey’s self-reliance in defense production and enhance the competitiveness of local companies in global markets.

With these reforms, Turkey aims to further increase the share of domestic industry in defense projects and build a more resilient, innovation-driven defense ecosystem that meets both national security needs and emerging global trends.