Drone Warfare Market Report 2025

The drone warfare market size has grown rapidly in recent years. It will grow from $25.44 billion in 2024 to $28.73 billion in 2025 at a compound annual growth rate (CAGR) of 13%. The growth during the historic period is driven by the expanding use of unmanned systems in military operations, heightened demand for intelligence, surveillance, and reconnaissance (ISR) capabilities, escalating geopolitical tensions, increasing defense budgets in emerging economies, and a growing need for precision strikes.

The drone warfare market size is expected to see rapid growth in the next few years. It will grow to $46.18 billion in 2029 at a compound annual growth rate (CAGR) of 12.6%. The growth expected in the forecast period is driven by an increasing need for rapid deployment and logistics support, rising demand for swarming drone tactics, expanded use in maritime and naval operations, a growing focus on low-cost expendable drones, and heightened emphasis on electronic warfare capabilities. Key trends during this period include the development of counter-drone defense systems, advancements in autonomous decision-making, integration with manned military assets, incorporation of cyberwarfare tools, innovations in modular payloads, and progress in swarm intelligence.

Rising military expenditures are expected to drive the expansion of the drone warfare market in the coming years. Military spending includes the funds governments allocate to maintain and upgrade their armed forces, covering costs such as personnel, equipment, research, development, and operations. This increase is largely driven by escalating geopolitical tensions and regional security issues around the world. Higher military budgets support the advancement of drone technology by providing resources for the development of more sophisticated and adaptable unmanned systems. This investment enhances defense capabilities through improved research, development, and acquisition of drones, boosting operational efficiency and battlefield preparedness. For example, in April 2024, the Stockholm International Peace Research Institute (SIPRI), a Swedish NGO, reported that global military spending reached $2.443 trillion in 2023, a 6.8% rise from 2022. As a result, growing military budgets are fueling the growth of the drone warfare market.

Leading companies in the drone warfare sector are developing advanced technologies such as hybrid vertical take-off and landing (VTOL) systems to enhance mission duration and accuracy in surveillance and strike tasks. A hybrid VTOL combines the vertical lift and landing ability of a helicopter with the efficient forward flight of a fixed-wing aircraft. For example, in March 2023, BAE Systems plc, an Australian defense and aerospace firm, collaborated with Innovaero Pty Ltd, an Australian aerospace engineering company, to introduce the STRIX Hybrid VTOL Uncrewed Air System. This versatile unmanned aerial system (UAS) is designed for multi-domain, multi-role missions, such as air-to-ground attacks and intelligence, surveillance, and reconnaissance (ISR) in dangerous settings. It can carry a payload of up to 160 kg across 800 kilometers, fits into a standard shipping container for easy transport, and operates autonomously with sophisticated sensor and electronic warfare features.

In September 2024, Red Cat Holdings Inc., an American military technology firm, acquired FlightWave Aerospace Systems Inc. for an undisclosed sum. This acquisition is intended to help Red Cat Holdings deliver portable, affordable drones to warfighters, improving intelligence, surveillance, reconnaissance, and precision strike capabilities to address changing defense requirements on the battlefield. FlightWave Aerospace Systems Inc. is a US company specializing in drone technology for surveillance and tactical drone operations.

Major players in the drone warfare market are The Boeing Company, Airbus SE, Lockheed Martin Corporation, Northrop Grumman Corporation, BAE Systems plc, Thales Group, Textron Inc., Rheinmetall AG, Elbit Systems Ltd., Israel Aerospace Industries Ltd., Saab AB, General Atomics Aeronautical Systems Inc., Kratos Defense And Security Solutions Inc., AeroVironment Inc., Skydio Inc., Garuda Aerospace Pvt. Ltd., Baykar Technologies, Anduril Industries Inc., Apollyon Dynamics Pvt. Ltd., and Wild Hornets Defense Technologies.

North America was the largest region in the drone warfare market in 2024. Asia-Pacific is expected to be the fastest-growing region in the forecast period. The regions covered in drone warfare report are Asia-Pacific, Western Europe, Eastern Europe, North America, South America, Middle East and Africa. The countries covered in the drone warfare market report are Australia, Brazil, China, France, Germany, India, Indonesia, Japan, Russia, South Korea, UK, USA, Canada, Italy, Spain.

Note that the outlook for this market is being affected by rapid changes in trade relations and tariffs globally. The report will be updated prior to delivery to reflect the latest status, including revised forecasts and quantified impact analysis. The report’s Recommendations and Conclusions sections will be updated to give strategies for entities dealing with the fast-moving international environment.

The sharp hike in U.S. tariffs and the associated trade disputes in spring 2025 are notably impacting the aerospace and defense sector by raising costs for titanium, carbon fiber composites, and avionics materials largely sourced from global suppliers. Defense contractors, locked into fixed-price government contracts, absorb these added costs, while commercial aerospace firms face airline pushback on higher aircraft prices. Delays in component shipments due to customs bottlenecks further disrupt tight production schedules for jets and satellites. The industry is responding by stockpiling critical materials, seeking waivers for defense-related imports, and collaborating with allied nations to diversify supply chain.

Drone warfare involves the use of unmanned aerial vehicles (UAVs) in military operations for tasks such as surveillance, intelligence collection, and precision strikes. This approach improves combat effectiveness while minimizing risks to human soldiers by enabling remote-controlled or autonomous missions. It also offers real-time situational awareness, accurate targeting, and enhanced operational efficiency in conflict areas.

The primary types of drones used in warfare are fixed-wing, hybrid, and rotary-wing. Fixed-wing drones are aircraft that generate lift through stationary wings and require forward movement to stay aloft. They are typically employed for long-range missions, surveillance, or tactical strikes. These drones can operate in autonomous or semi-autonomous modes and support various payload capacities, including low, medium, and high. They are utilized in military operations, border security, counterterrorism, search and rescue, and disaster response, serving end users such as military forces, government agencies, and private contractors.

The drone warfare market research report is one of a series of new reports that provides drone warfare market statistics, including drone warfare industry global market size, regional shares, competitors with a drone warfare market share, detailed drone warfare market segments, market trends and opportunities, and any further data you may need to thrive in the drone warfare industry. This drone warfare market research report delivers a complete perspective of everything you need, with an in-depth analysis of the current and future scenario of the industry.

The drone warfare market consists of revenues earned by entities by providing services such as maintenance and support services, training and simulation, electronic warfare, drone design and customization services, and counter-drone operations. The market value includes the value of related goods sold by the service provider or included within the service offering. The drone warfare market also includes sales of drone payloads, cameras, sensors, weaponry, navigation systems, and propulsion units. Values in this market are ‘factory gate’ values; that is, the value of goods sold by the manufacturers or creators of the goods, whether to other entities (including downstream manufacturers, wholesalers, distributors, and retailers) or directly to end customers. The value of goods in this market includes related services sold by the creators of the goods.

The market value is defined as the revenues that enterprises gain from the sale of goods and/or services within the specified market and geography through sales, grants, or donations in terms of the currency (in USD unless otherwise specified).

The revenues for a specified geography are consumption values that are revenues generated by organizations in the specified geography within the market, irrespective of where they are produced. It does not include revenues from resales along the supply chain, either further along the supply chain or as part of other products.

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