Israel has managed to stay in the top ten arms exporters for over a decade and in doing so has steadily increased its share of annual worldwide arms export market. Over the last five years Israel has gone from accounting for 2.1 percent of arms exports to 3.1 percent. Arms exports are still dominated by the same five nations (United States, Russia, France, Germany, and China) that account for 75 percent of exports. But Israel got on the list because it offers a lot of combat proven military technology and weapons. Israel is also taking sales away from Russia, which has made a lot money over the last half century selling high tech weapons to India. Israel came along and offered more reliable and effective tech and India has become a regular and satisfied customer while reducing purchases from Russia. In the last decade Israeli arms exports grew 60 percent while Russia suffered a 17 percent decline.
This Israeli prominence as an arms exporter is not something new. Despite decades of Arab boycotts and pressure on countries to not deal with Israel, Israeli military exports continue to grow. By 2012 Israeli firms sold $1.8 billion worth of weapons to the Americas (mostly the United States, but a third of that went to South America), $1.6 billion to European customers, and $200 million to African nations. About half those sales are for anti-aircraft systems. Israel has a wide range of anti-aircraft and anti-missile systems, many of them using successful Israeli air-to-air missile designs for ground based systems. Israeli air defense technology has proved itself in combat, is famous for its reliability and technical excellence, and is priced to sell. Israel is also a major exporter of military space satellites, night vision and surveillance gear, and all manner of military communications equipment. Israel is also second only to the U.S. as a UAV exporter and was first to develop a lot of key UAV technology that the U.S. built on. Israel pioneered the development of add-on armor for combat and non-combat vehicles. Israel is also one of the premier developers of electronic warfare equipment (for aircraft and ground vehicles). Israel exports warships, warplane upgrades, and all manner of technical service.
Because of all this, Israeli military exports were huge a decade ago when annual sales had already reached $7 billion. In 2007 Israel became one of the top four arms exporters on the planet, shipping $7.2 billion worth of military equipment. The year before Israel had exported $6.9 billion. The U.S. is the largest exporter, followed by Russia and Germany. Israel is holding on as number four despite being much smaller than the top three (the U.S. has a population of 310 million, Russia 142 million, and Germany 82 million people, compared to 7.8 million in Israel). Israel defense exports account for about three percent of their GDP, compared to .7 percent in Russia and even less in the United States and Germany.
Half the weapons exported worldwide recently came from the United States (mostly) and Russia. European nations have long occupied the next three slots (Germany, France, and Britain). But during the last five years German and Israeli exports have been growing. The other big exporters are Spain, China, the Netherlands, and Italy. These top ten exporters accounted for over 90 percent of the exports. The major importers are Middle Eastern Arab nations, India, South Korea, China, and (until 2008) Greece.
Israel and Germany have been gaining more sales because of reliability and quality. Israel has a major advantage in that many of its weapons and military equipment have proved their worth in combat. Often subject to arms embargoes, Israel learned to design and build a lot of its own weapons and equipment. With a highly educated and motivated workforce, Israeli gear was often world class, while also cheaper and more reliable (and often combat proven) than similar stuff coming from the United States and Europe.