Serbia opens assembly plant in Belgrade to produce Israeli-designed drones

Inauguration and facility specifications

Serbian President Aleksandar Vucic inaugurated a drone assembly plant in Belgrade on 17 September 2026. The manufacturing facility, operating under the name SDS Technologies, is designed to employ roughly 100 people and produce both short-range and long-range unmanned aerial systems. The drones are intended to equip the Serbian Armed Forces and be exported to foreign militaries. Members of the press were excluded from the inauguration event, with Vucic citing the confidentiality of the production line. Israeli Ambassador Avivit Bar-Ilan attended the site visit alongside Serbian government officials. The Serbian leader initially announced plans to manufacture combat drones in partnership with Israel in April 2026.

Our plans are huge. We believe that we will open with our Israeli partners at least three more factories throughout Serbia.

Joint venture and component manufacturing

During the facility tour broadcast on social media, Vucic observed technical demonstrations and briefly operated one of the drones. A factory technician briefed the president on the internal flight systems, prompting Vucic to remark that the assembly appeared more complicated than anticipated. The drones are designed for tactical urban engagement and can fly through windows to strike targets. Warheads for the unmanned aircraft will be manufactured separately at the Krusik state arms factory in Serbia. Investigations published by the Balkan Investigative Reporting Network and the Israeli newspaper Haaretz indicated that Israeli defence firm Elbit Systems controls a 51% stake in the joint venture, while Serbian state-owned arms intermediary Yugoimport-SDPR holds the remaining 49%. Neither Elbit Systems nor the Serbian Defence Ministry provided official comments on the equity arrangement.

Surge in bilateral defence exports

The drone manufacturing project follows a substantial increase in military commerce between Serbia and Israel. Data compiled by BIRN and Haaretz showed that Serbian arms sales to Israel grew from 1.4 million euros ($1.6 million) in 2023 to 42.3 million euros ($48.5 million) in 2024. During a visit to Serbia in 2026, United Nations Special Rapporteur on the occupied Palestinian territories Francesca Albanese stated that Belgrade remained one of Israel's most steadfast and determined allies, despite wider international appeals to restrict arms shipments during the war in Gaza. Vucic stated in August 2026 that the objective of building domestic drone capacity is to preserve national stability and deter potential aggressors.

Partnership with Israel can help Serbian manufacturers reach an equal level of quality, but the more important question is what the consequences of Serbia's broader diplomatic rapprochement with it will be.

Neutrality policy and electoral pressures

Serbia is not a member of NATO and remains the largest military spender in the Western Balkans. Zain Hussain, an arms transfer researcher at the Stockholm International Peace Research Institute (SIPRI), noted that Serbia is expanding military modernization across several fronts while continuing its defence collaboration with Israel. Belgrade ordered 12 French-built Rafale fighter jets in 2024 and has acquired air defence systems and hardware from China and Russia, balancing those ties against its formal candidacy for European Union membership. Domestically, the factory opening precedes an early parliamentary election scheduled for 25 October 2026, which follows nearly two years of anti-government protests across Serbia.