Israel Signs Contract to Boost Arrow Missile Production

Defense Ministry accelerates interceptor output at IAI following Arrow system's key role in Operation Rising Lion
  • Defensemirror.com bureau
  • 10:43 AM, July 17, 2025
  • 4161
Israel Signs Contract to Boost Arrow Missile Production
Arrow air defense system launches missile during the Israel-Iran war in June 2025 @Israel MoD

Israel has signed a new production contract with Israel Aerospace Industries (IAI) to significantly accelerate the manufacturing of Arrow missile interceptors, following the Arrow system’s extensive use during the recent war with Iran.

Maj. Gen. (Res.) Amir Baram, Director General of the Israel Ministry of Defense (IMOD), finalized the deal aimed at increasing the availability of Arrow systems for future threats. The contract is part of a broader effort led by the Israel Missile Defense Organization (IMDO), under the Directorate of Defense Research and Development (DDR&D), to expand Israel’s missile defense capacity.

“The Arrow system proved to be a key component of Israel’s defense during Operation Rising Lion,” Baram said. “This contract ensures we’re prepared for the next round of threats.”

During the 12-day conflict from June 13 to 24, Iran launched over 550 ballistic missiles at Israel. The Arrow system—jointly developed with the U.S. Missile Defense Agency (MDA)—reportedly intercepted 86% of those missiles, helping prevent an estimated $15 billion in property damage and saving many lives.

Despite these efforts, more than 20 people people—including four children and one soldier—were killed, and over 3,000 were injured. The attacks also led to the evacuation of more than 15,000 residents. Damage claims from the conflict exceeded 41,000, according to the Israel Tax Authority.

Arrow 2 and Arrow 3 interceptors were used in the war, with Arrow 2 targeting medium-range threats and Arrow 3 handling long-range exo-atmospheric interceptions. Each interceptor costs between $2 million and $3 million, contributing to over $1 billion in total missile defense expenditures during the war. The Arrow 4, now under development, is expected to counter future threats, including hypersonic weapons.

The new deal will see IAI serve as the prime contractor, producing interceptors at its MLM facility. U.S.-based Stark Aerospace, along with Israeli firms including Elbit Systems, Rafael, Tomer Ltd., and IAI’s ELTA and TAMAM divisions, will support the effort.

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