Italy Precision-Guided Munition Market Overview, 2031

Key Insights

• The Italian precision-guided munition market is undergoing a historic transformation driven by the largest sustained increase in defence spending in recent history. Italy's ordinary defence budget for 2025 amounts to €31.2 billion, a 7.2% rise compared with 2024, with spending set to reach €31.2 billion and €31.7 billion in 2026 and 2027, respectively. Italy has also successfully reached NATO's 2% GDP defence spending target for 2025 through the recategorisation of additional outlays, bringing total defence related spending to €45.3 billion.
• Italy is simultaneously pursuing a two-pronged strategy: acquiring cutting-edge precision-guided munitions from international partners including 100 JASSM-ER cruise missiles from the U.S. and 21 HIMARS launchers while investing heavily in domestic production through MBDA's Fusaro facility, Leonardo's Vulcano programme, and Rheinmetall's loitering munitions manufacturing in Italy.
• MBDA has doubled missile production between 2023 and 2025 and is investing €2.4 billion between 2025 and 2029 to ensure continued production ramp-up. The company has also strengthened its production commitments through investments at its Fusaro facility in Italy, alongside sites in Bourges and Selles-Saint-Denis in France.
• Italy is expanding its F-35 fleet from 90 to 115 aircraft, with €735 million earmarked for 2025 for the fifth-generation F-35 weapon system programme. The fleet will be armed with 100 AGM-158B/B-2 JASSM-ER long-range cruise missiles approved by the U.S. State Department in December 2025.

Market Outlook

• According to the research report, "Italy Precision-Guided Munition Market Outlook, 2031," published by Bonafide Research, the Italy Precision-Guided Munition Market is expected to reach a market size of more than USD 1.19 Billion by 2031.
• Italy's PGM market is being driven by a fundamental realignment of defence priorities in response to the deterioration of the geopolitical landscape. As stated by Defence Minister Guido Crosetto, "This is not simply a matter of increasing expenditure, but of making courageous and strategic choices, oriented towards the profound transformation of the military instrument, so that it is ready to face any kind of threat, at any time, and for as long as necessary".
• The Italian Army is acquiring 21 M142 HIMARS high-mobility artillery rocket systems from the United States to expand its long-range strike capabilities. The acquisition, confirmed on 7 January 2025, includes 14 additional launchers bringing the total to 21, complementing the 21 modernized M270A1 MLRS-I systems already in service since 2011. The total programme cost, including launchers, GMLRS and ATACMS munitions, associated equipment and services, is estimated at €960 million. The programme includes the acquisition of 120 GMLRS-ER extended-range guided rockets. The new HIMARS systems will replace some of the existing M270A1 systems and significantly enhance the Army's ability to conduct deep precision strikes.
• The Italian Army is modernizing its short-range air defence capabilities through the CAMM-ER programme. Programme SMD 30/2025, named "Rinnovamento SHORAD GRIFO su missile CAMM-ER", provides for the production of new GRIFO systems for the Army and MAADS (Medium Advanced Air Defence System) for the Air Force, both based on the CAMM-ER (Common Anti-air Modular Missile Extended Range) missile. These systems will replace obsolete Aspide-based systems. The programme received an additional €191 million through the 2025 Budget Law.
• Loitering munitions are emerging as a significant growth segment. Rheinmetall received an order valued in the low three-digit million euro range to supply HERO loitering munition systems to a NATO customer identified as Italy. A total of several hundred systems have been ordered, with deliveries scheduled to begin in the first quarter of 2026 and be completed by the end of that year. The systems will be produced in Italy by RWM Italia with the support of partner UVision Air Ltd. Rheinmetall's order portfolio for HERO loitering munitions now exceeds €200 million, with deliveries to eight different European countries.

Policies & Regulatory Landscape

• The Multi-Year Defence Programming Document 2025-2027, submitted to the Parliamentary Defence Committee on 7 October 2025, serves as the guiding framework for transforming Italy's defence capabilities. The document outlines a significant increase in defence spending over the 2024 budget and details investment plans across all domains.
• Italy has signed up for a share of the €150 billion Security Action for Europe defence fund, at least €127 billion of which has already been requested by European countries.
• The Defence Industries Agency signed a strategic collaboration agreement with KNDS Ammo Italy in June 2025, focusing on the production and commercialization of ammunition for the defence market, with priority given to the Italian Armed Forces. The initiative aims to ensure Italy's strategic autonomy in ammunition production.
• AID also signed a strategic cooperation agreement with Leonardo in July 2025 for the production and commercialization of a newly designed artillery shell for land-based artillery, intended for both the Italian military and international markets.
• Italy's defence procurement framework operates through the parliamentary approval process under Article 536 of the Military Code, with major programmes requiring parliamentary scrutiny. The Ministry of Defence transmits programme proposals to Parliament for the acquisition of parliamentary opinion prior to final approval.

PGM Procurement & Industry Impact

• The HIMARS acquisition is a major milestone for the Italian Army's long-range precision strike capabilities. Italy's 21 new M142 HIMARS will complement the 21 modernized M270A1 MLRS-I systems already in service. The programme includes GMLRS and ATACMS missiles, with €137 million or €145 million according to other sources allocated in the 2024 budget.
• The TESEO MK2/E anti-ship missile programme represents a complete redesign of Italy's long-range anti-ship missile capability. MBDA signed a production contract with Italy's National Directorate of Naval Armaments in September 2025 for the new-generation TESEO MK2/E anti-ship missile. The missiles will equip new Italian Navy units including FREMM EVO-class frigates,Multi-Purpose Combat Ship/Patrol Vessels, and the new-generation DDX destroyers. The system allows enhanced mission planning including in-flight missile control via satellite data link, an innovative RF seeker, and full in-flight mission control.
• The Aster air defence missile programme is undergoing unprecedented production acceleration. MBDA delivered the first accelerated-production Aster missiles in July 2025 less than two and a half years after the initial December 2022 order. Between 2023 and 2025, MBDA doubled missile production across the Group. The company is investing €2.4 billion between 2025 and 2029 to ensure the production ramp-up over the coming years. A joint France-Italy-UK order for additional Aster missiles was placed in February 2025.
• The Meteor beyond visual range air-to-air missile programme is being supported through Italy's participation in international cooperation frameworks. The missile equips both Eurofighter Typhoon and F-35 aircraft.
• Italy is developing Ballistic Missile Defence capabilities through the acquisition of 4 dedicated BMD sensors capable of detecting threats at long range, tracking ballistic trajectories, calculating impact points with progressively reduced error margins, and enabling interception before the threat strikes friendly territory.

Industry News

• Leonardo is Italy's premier defence electronics and munitions manufacturer. The company developed the Vulcano precision-guided artillery munition, with subsequent contribution from German company Diehl Defence for the semi-active laser sensor. Vulcano is primarily manufactured in Italy by Leonardo and the Military Land Munitions Plant in Baiano di Spoleto. Leonardo also signed a strategic cooperation agreement with AID in July 2025 for the production of a newly designed artillery shell.
• Rheinmetall is expanding its loitering munitions production in Italy through its subsidiary RWM Italia. The company received an order in the low three-digit million euro range to supply HERO loitering munition systems to Italy. A total of several hundred systems have been ordered, with deliveries scheduled to begin in Q1 2026. The systems will be produced in Italy by RWM Italia with support from partner UVision Air Ltd. Rheinmetall's order portfolio for HERO loitering munitions exceeds €200 million.
• Lockheed Martin is the principal contractor for the JASSM-ER programme, responsible for missile production and all technical integration support for the F-35. The company is also the manufacturer of the F-35 aircraft Italy is acquiring.
• KNDS Ammo Italy signed a strategic collaboration agreement with AID in June 2025 for ammunition production and commercialization, with priority given to the Italian Armed Forces. The initiative aims to ensure Italy's strategic autonomy in ammunition production.

Segment Analysis

Italy Precision-Guided Munition Market By Product Type
• Loitering munitions are increasingly developed through compact electronics integration and modular airframe architectures aligned with Italy’s evolving focus on autonomous defense systems. Manufacturing typically requires 6 to 15 months, while storage life ranges between 8 to 15 years under regulated conditions. Preventive maintenance cycles are commonly conducted every 2 years, while electronic subsystem replacement is generally required after 6 to 8 years as part of lifecycle sustainability planning.
• Interceptor missiles form a highly specialized segment within Italy’s defense industrial and procurement ecosystem, supported by advanced systems engineering and long-term sustainment frameworks integrated with European missile development programs. Production cycles generally range from 24 to 36 months, while storage life extends between 15 to 30 years under controlled logistics and safety compliance conditions. Depot-level inspection programs are typically conducted every 3 to 5 years, with major refurbishment cycles generally initiated after 15 years as part of structured lifecycle extension and reliability assurance strategies.
• Torpedoes are supported by established naval defense manufacturing capabilities in Italy, aligned with long-term maritime capability development and system modernization initiatives. Manufacturing lead times generally range from 18 to 30 months, while storage life extends between 15 to 25 years depending on maintenance and preservation conditions. Scheduled overhaul programs are commonly conducted every 4 to 6 years, with subsystem replacement cycles occurring after 5 to 8 years as part of lifecycle sustainment and naval readiness optimization programs.

Italy Precision-Guided Munition Market By Subsystem
• Target acquisition systems incorporate advanced electro-optical and sensor-based technologies developed through Italy’s defense electronics and imaging industry capabilities. Manufacturing cycles generally range from 6 to 15 months, while subsystem lifecycle spans 10 to 18 years depending on integration architecture. Calibration and inspection programs are typically conducted every 2 to 3 years, supported by structured environmental testing and performance validation protocols.
• Propulsion systems represent one of the most technically intensive subsystems within Italy’s defense manufacturing ecosystem, requiring precision engineering and controlled production environments. Manufacturing cycles generally range from 12 to 24 months, while storage life extends between 10 to 20 years under regulated conditions. Major maintenance activities are typically scheduled every 3 to 5 years, with refurbishment programs generally initiated after 10 to 15 years as part of long-term sustainment planning.
• Warheads are produced under strict safety, compliance, and quality assurance frameworks within Italy’s defense production ecosystem, aligned with international handling and storage regulations. Assembly lead times generally range from 8 to 18 months, while storage life extends between 15 to 30 years under controlled environmental conditions. Inspection cycles are typically conducted every 3 to 5 years, with refurbishment and safety validation programs generally initiated after 12 to 18 years.

Italy Precision-Guided Munition Market By Launch Platform
• Land based launch platforms in Italy are supported by modular launcher systems and structured defense modernization programs focused on mobility, interoperability, and lifecycle efficiency. Integration cycles generally range from 10 to 20 months, while preventive maintenance is typically scheduled every 12 to 36 months. System upgrade programs are generally undertaken after 10 to 15 years as part of long-term operational readiness enhancement strategies.
• Naval platforms form a key component of Italy’s maritime defense modernization strategy, supported by advanced combat system integration and shipborne launch capabilities. Integration cycles generally range from 18 to 30 months, while lifecycle support extends beyond 20 years under structured maintenance frameworks. Scheduled maintenance activities are typically performed every 18 to 36 months, supported by periodic combat system upgrades and electronic modernization initiatives.
• Unmanned systems are an expanding segment within Italy’s defense ecosystem, driven by autonomous technologies, modular payload integration, and digital command-control systems. Integration cycles generally range from 6 to 18 months, while software upgrade cycles occur 3 to 6 times annually depending on mission requirements. Preventive maintenance intervals typically range from 6 to 18 months, with overall system service life extending between 10 and 20 years under structured lifecycle management programs.

Considered in this report
• Historic Year: 2020
• Base year: 2025
• Estimated year: 2026
• Forecast year: 2031

Aspects covered in this report
• Precision-Guided Munition Market with its value and forecast along with its segments
• Various drivers and challenges
• On-going trends and developments
• Top profiled companies
• Strategic recommendation

By Product Type
• Tactical Missiles
• Guided Rockets and Artillery Shells
• Guided Bombs (PGMs/Smart Bombs)
• Loitering Munitions
• Interceptor Missiles
• Torpedoes
• Hypersonic Missiles

By Subsystem
• Guided and Navigation Systems
• Target Acquisition Systems
• Propulsion Systems
• Warheads
• Power Supply Systems

By Launch Platform
• Airborne
• Land-based
• Naval
• Unmanned Systems