The National Defence Industry Policy (NDIP) was officially launched yesterday at the Malaysia International Trade and Exhibition Centre, marking a significant milestone in Malaysia’s efforts to build a self-reliant and sustainable defence sector.
Defence Minister Datuk Seri Mohamed Khaled Nordin said the NDIP would serve as a strategic enabler to transform the ministry’s operations while strengthening national security.
He said the policy provides a clear roadmap for long-term transformation initiatives, ensuring Malaysia is prepared to face an increasingly complex and uncertain global security landscape.
“It would be regrettable if the substantial annual allocations to the ministry were not leveraged to develop a self-reliant, sustainable and resilient national defence industry,” he said.
A key feature of the NDIP is its emphasis on establishing a comprehensive ecosystem to support the domestic defence industry. The policy will be implemented in four progressive phases. The first phase, from 2025 to 2026, focuses on building the foundation and policy development. Phase two, from 2026 to 2027, aims to strengthen the industry and advance technological capabilities. Phase three, from 2028 to 2029, will expand industry capability and readiness, while phase four, beginning in 2030, targets full operational maturity and global competitiveness.
Khaled said the policy reflects strong government commitment, particularly through high-value procurement and sustained budgetary support. It also introduces reforms to defence procurement practices, including a requirement for a minimum of 30 per cent domestic content in all procurements. In addition, maintenance, repair and overhaul activities must be carried out by local companies, except during warranty periods managed by original equipment manufacturers.
Domestic companies will be expected to demonstrate innovation and efficiency, with failure to meet performance targets potentially resulting in contract termination.
The NDIP also outlines an aggressive Industrial Collaboration Programme (ICP) aimed at facilitating technology transfer to capable Malaysian firms. This is complemented by enhanced support for research and development, funded through the Defence Science and Technology Research Institute.
To streamline engagement with industry players, the Defence Industry Portal was unveiled during the launch. The portal offers three key services: ICP applications for technology acquisition, R&D applications for product innovation, and a platform for domestic companies to offer technologies for defence applications.
Khaled also announced several national defence projects under the policy, including the development of satellites to replace expiring contract services by 2029, laser defence systems, assembly and manufacturing of land vehicle chassis, production of various weapon systems, passive radar technologies, loitering munition systems and defence simulators.
