Defence spending in France is predicted to increase by $25.1bn within the next five years, according to GlobalData, reflecting changing priorities in an increasingly unstable world.
Russia’s invasion of Ukraine in 2022 has transformed spending priorities in Europe, with the largest scale of conflict happening on the European continent arguably since the end of the Second World War.
To adapt, many European nations are implementing measures to bolster their national security. As a leader in NATO, France has been developing the policy framework to strengthen its defence industry for the long term.
French market growth follows the defence industry modernisation started by the Macron administration in its Military Planning Law 2019-25, which featured incrementally larger annual budgets. This initiative continued more recently in the Military Planning Law 2024-30, which outlines plans to invest in and implement emerging technologies such as space technologies and unmanned systems.
This increase in the French defence budget aligns with the spending goals for NATO member countries to reach 3.5% of GDP by 2030.
Key activity in the French defence market segments
A detailed analysis of activities in France was provided in the recent report by GlobalData titled France Defence Market: Size and Trends, Budget Allocation, Regulations, Key Acquisitions, Competitive Landscape, and Forecast, 2025–301.
With a cumulative market value of $19.5bn, the biggest defence segment in the French market is forecast to be military fixed-wing aircraft from 2025-30. Largely focused on the multirole aircraft segment, the sector has a compound annual growth rate (CAGR) of 5.3%. Notable factors driving procurement include the variants of Dassault Aviation’s Rafale platform and investments in the collaborative New Generation Fighter (NGF) Future Combat Air System programme, where France partners with Germany and Spain.
Transport aircraft account for the second-largest sector, with the procurement of the A400M Atlas being one area of significance. The third biggest segment within this is for tanker aircraft, with a prominent project from Airbus in the A330 MRTT procurement.
The second-highest sector by forecast value is submarines, with a cumulative market value of $11.5bn, and 4.8% (CAGR). Key projects are the development of four third-generation nuclear-powered ballistic missile submarines (SNLE 3G). From 2035, the new vessels are slated to replace the four existing Le Triomphant-class (SNLE 2G) nuclear-powered ballistic missile submarines (SSBNs).
While the third largest sector by forecast value is naval vessels and surface combatants, which has a predicted cumulative market value of $10.2bn and a CAGR of 8.1%. One major naval project for the French Defence Procurement Agency (DGA) is the Defence and Intervention Frigate (FDI).
To be used by the French Navy, the frigate will have a range of advanced capabilities to perform multiple warfare operations in line with evolving threats. These include anti-surface and air operations, as well as anti-submarine activities.
The FDI will also feature advanced technologies that will be routinely updated to ensure the vessel is equipped to counter existing and future threats. One stand-out feature for the FDI is that the vessel will house two onboard data centres capable of running the majority of vessel applications, eliminating the need to be heavily reliant on external data hosting facilities.
As the battlefield evolves and technology plays a greater role in strategic operations, there is also a focus in France on defence market sectors such as unmanned systems and space capabilities.
Space systems are integral to support greater efficiency in battlefield operations. For example, the 2024-2030 military programming law has set aside approximately $6.97bn for initiatives dedicated to the area of space in defence. The Syracuse V communications satellite is a key project anticipated to start in 2027, with the first satellite delivery scheduled for 2035.
The international collaborations in the French defence market
The domestic market in France is bolstered by the government imposing restrictions on the acquisitions of key suppliers by international companies to greater insulate against supply chain disruption and curb the access to confidential information by external parties.
However, international collaborations and partnerships remain of the utmost strategic importance in French defence. Collaborations on projects in Europe include the SCORPION tank modernisation programme with Belgium, and the SAMP/T missile defence programme with Italy to develop new varieties of the weapons due to the war in Ukraine.
France also has a $586m contract with Poland for Airbus to supply Pleiades Neo satellites. While the Polish satellites are being developed, France will continue to share geospatial data for intelligence with Poland. With global tensions showing no signs of cooling, GlobalData analysis suggests that France will continue to have bilateral collaborations to help reduce rising costs and strengthen strategic relationships.
Furthermore, France is actively involved in collaborative programmes with technology-sharing agreements with trusted international partners to develop new solutions domestically.
Outside Europe, France is also engaged with partners in the Middle East and Asia-Pacific to build diplomatic operations and support allies. Since 2015, France has been in discussions with the Philippines to potentially develop a bilateral security agreement. The Philippines could be a valuable strategic ally amid tensions in the region.
Why supply chain finance is vital in defence
The presence in France of major defence companies, such as Thales, Airbus, and Dassault Aviation, means that there is no shortage of international partners seeking to do business in the country. An optimised supply chain is imperative to ensure that operations run smoothly.
Reliable supply chain finance is vital for partners involved in manufacturing components and delivering services. In defence, any delays can severely disrupt operations and have consequences on the battlefield in the worst-case scenarios.
Supply chain finance solutions such as those provided by SAP Taulia can ensure that payments to suppliers can be made on time or early, using third-party funding. This means production schedules proceed as planned, with shipments arriving when and where they are needed.
The finance solutions available from SAP Taulia enable the rapid coverage of the complete supply chain. SAP Taulia’s network operates on a global scale and comprises upwards of millions of suppliers.
With SAP Taulia solutions, suppliers can be secure in the knowledge that payments will be received on time, and even ahead of schedule, to enable defence supply chains to function optimally in the long term.
To learn more about the French defence market, as well as the UK and Germany, and SAP Taulia’s solutions, download the specially commissioned document below.
References:
1. France Defence Market: Size and Trends, Budget Allocation, Regulations, Key Acquisitions, Competitive Landscape, and Forecast, 2025–30.
https://www.globaldata.com/store/report/france-defense-market-analysis/?utm_source=sponsored&utm_medium=3-319339&utm_campaign=thematic-report-hyperlink&CampaignValue=701Ti00000PWazlIAD
