June 11, 2026
TOKYO – The government has begun preparations for the establishment of a new organization to support the nation’s defense industry through measures including the promotion of defense equipment exports, several government sources said.
The new entity will likely take the form of an independent administrative agency whose activities will involve public-private partnerships and cross-ministry cooperation.
The government is also considering introducing a Japanese version of the U.S. Foreign Military Sales (FMS) program, in which the state would act on companies’ behalf as a contact point for exports and support post-export operations such as maintenance and training in client countries. It would also provide funding to start-ups, seek to nationalize production lines and quickly upgrade industrial infrastructure to make it capable of coping with emergency conditions.
The government will lay out the goals of the new organization in the National Security Strategy and two other security documents to be revised within this year, and it aims to enact relevant legislation next year. Russia’s aggression in Ukraine has demonstrated the importance of acquiring combat sustainability, making it vital to reinforce the defense industry.
The main roles of the organization will be export promotion, start-up support and reinforcement of the production base. April’s relaxation of defense equipment export restrictions is expected to boost exports, but a national commitment to creating a support system is necessary.
Exports will lead to the expansion of the defense industry market, but they often require comprehensive support, such as specification changes to meet customer needs, as well as post-export maintenance and training. In addition, it is not easy for companies to secure contracts on their own.
The Defense Ministry and the Economy, Trade and Industry Ministry currently provide support for the industry. The new independent organization is expected to work as a liaison while also actively recruiting talent from the private sector to pool expertise from both the public and private sectors. The process of securing and nurturing talented people will be more efficient if handled by this organization, rather than by ministries where personnel rotate in and out regularly.
The government may also invest in and offer loans to start-ups developing dual-use technologies such as artificial intelligence and unmanned vehicles. To boost production of ammunition and other equipment, it will promote the adoption of a “government-owned, privately operated” model in which nationalized production lines are run by private companies.
In consideration of some makers’ concern about reputational risks, the government is mulling the adoption of a structure in which the new organization would buy up equipment from manufacturers first and act as a contract portal for clients.
As a point of reference in designing this system, the government will look at the U.S. FMS program, which enables Washingtonq to sell U.S.-made defense articles to the governments of its friends and allies, based on laws including the Arms Export Control Act. The system therefore makes the U.S. government — rather than the manufacturers — the negotiator and contractor for such sales. The FMS is used for exporting highly classified equipment but comes with such challenges as soaring prices and delivery delays.
The Liberal Democratic Party on Tuesday finalized its proposals regarding the revision of the three security documents and urged “unprecedented structural reforms” to revitalize the defense industry.