The Lithuanian Government approved a draft law on 10 April 2024, designed to expand the opportunities for defence industry growth. It is believed the legislation will strengthen national security and advance the Baltic nation’s competitiveness in the global defence market.

Fundamentally, the country hopes to abide by a new market economy model of growth for the sector.

“It is particularly important that Lithuanian companies have favourable conditions to engage in designing, developing and maintaining priority capabilities of our Armed Forces in the changed security environment,” the Chancellor, Giedrė Balčytytė, described.

“It is our unmistakable national security priority, along with better opportunities to reveal the immense potential of the Lithuanian defence industry. Together we are designing incentives for a very promising co-operation between the scientific and business sectors, which is vital for any advanced, viable national economy,” the minister pledged.

The Law introduces modifications to the existing fragmented Lithuanian defence and security industry policy to the advantage of a new design of regulation that will highlight the role of security and defence industry in the context of national security.

It is proposed that the Government approves a list of defence equipment and weaponry necessary for developing priority capabilities of the Lithuanian Armed Forces. This would demonstrate clear directions of the Lithuanian defence industry development and allow industry entities to define for themselves which military technologies and equipment deserve investment.

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The new Law also lays the foundation for industrial co-operation. Indigenous manufacturers will be offered a chance to become involved in the priority defence equipment and weaponry procurements at the National Defence System. It regulates that a part of foreign defence equipment manufacturers or suppliers will have to implement their contractual obligations through the Lithuanian entities of the economy.

“This is not only a way to encourage our manufacturers but also an opportunity to reduce the dependence from foreign suppliers and to ensure that the defence infrastructure is more secure and self-sufficient,” explained the new Minister of National Defence, Laurynas Kasčiūnas, who took over from his predecessor at the end of March 2024.

Although, the draft bills still need to be approved at the Seimas – the legislative branch. Nevertheless, the regulation is expected to be adopted and come into force as soon as 1 July 2024.