The rapid expansion of Cyprus’s defense industry was emphasized during a recent session of the Parliamentary Committee on Energy, Trade and Industry. Both the Cyprus Chamber of Commerce and Industry (CCCI) and the Cyprus Association of Research and Innovation Enterprises (CARIE) highlighted this growth, noting a tenfold increase in the number of companies over recent years. According to CARIE, these companies are now generating revenues of approximately €40 million.

Defense Minister Vasilis Palmas referred to the defense sector as a matter of "emblematic importance" and reaffirmed its prioritization in governmental strategy. He credited the Ministry’s pivotal role in recent developments, including the establishment of specialized departments to support the industry.

The committee focused on industrial growth and innovation as critical dimensions of the defense sector's evolution. Minister Palmas stressed that Cyprus’s defense companies are ready to produce final products and contribute to both the public and private sectors. He emphasized the essential nature of supporting the industry and noted that companies are already drawing EU funding, which demands high reliability due to stringent audits.

The government also subsidizes participation in international defense expos and co-production projects with foreign partners. Palmas clarified that such support isn't exclusive to defense but extends across industries. Furthermore, he emphasized the inclusion of Cypriot firms in defense contracts with foreign contractors.

During the meeting, it was revealed that 13 Cypriot firms took part in a recent defense exhibition in Greece. The Ministry is working on a company registry to streamline collaboration with international firms, an effort confirmed by several defense and procurement officials.

The Director of General Supplies and Defense Capability Development, Panagiotis Chatzipavlis, welcomed Cyprus’s access to European Defence Fund resources. A €500,000 grant is currently supporting the development of a national defense strategy, expected to conclude in about 18 months.

National Guard Commander Lt. General Georgios Tsitsikostas highlighted the urgent need for timely procurement of suitable defense equipment. He pointed out long delivery delays and called for streamlined processes. Although no Cypriot firm has delivered final products to date, test trials have shown competitive potential.

Cyprus’s public universities and the Deputy Ministry of Research and Innovation expressed commitment to boosting R&D tied to defense. The University of Cyprus emphasized the need for regulatory flexibility to accelerate innovation, while the Cyprus University of Technology (CUT) highlighted its investment in dual-use cutting-edge technologies. The Deputy Ministry noted challenges in commercializing research and aims to strengthen university-industry ties.

DISY MP Kyriakos Hadjiyiannis praised the structural progress made but expressed concerns over the slow pace of strategic planning and lack of coordination from key ministries. AKEL MP Kostas Kostas echoed the sector’s vast potential and stressed its national significance, citing long-standing gaps in infrastructure like the delayed tech park.