Serbia has reached an agreement to produce drones domestically in partnership with Israeli defense giant Elbit Systems, a company long criticized for its role in Israeli military operations in Gaza and the West Bank, according to investigations by BIRN and Haaretz.
“Soon we will open the first factory of serious drones here in our country, very serious ones, among the world’s most advanced production,” President Aleksandar Vučić announced on March 7. While he confirmed a foreign partner from Israel would be involved, he did not disclose the company’s name at the time.
BIRN and Haaretz reveal that Elbit Systems, Israel’s largest defense company, will hold a 51 percent stake in the new Serbian drone factory, with the remaining 49 percent owned by domestic defense firm Yugoimport SDPR.
Controversial Legacy
The UN Special Rapporteur on the Occupied Palestinian Territories, Francesca Albanese, reported in June 2025 that Elbit is among companies benefiting from what she described as a “continuing genocide” in Gaza, where more than 70,000 Palestinians have died since the Hamas attacks in October 2023.
According to BIRN and Haaretz sources, the Serbian-Israeli factory, to be located in Šimanovci in a facility leased from media owner Željko Mitrović, will produce two types of drones: one for short-range missions with high payload capacity and rotary wings, and a faster, long-range model capable of flying above six kilometers. The long-range drone is said to surpass the capabilities of the Hermes 900 drones Serbia already produces, with increased operational autonomy and advanced technology transfer to Serbian engineers.
Elbit has faced repeated criticism for its contracts with the Israeli military. UN reports highlight that the company develops drones and other systems for surveillance, urban warfare, and targeted killings, which have been tested in Gaza. These drones, including hexacopters and quadcopters, are described as “ubiquitous killing machines in the skies over Gaza.” Israel denies allegations of genocide.
Expanding Defense Ties
The Serbia-Israel partnership builds on a growing defense relationship. Serbian exports of ammunition and weapons to Israel rose 42-fold in 2023, reaching €114 million by year’s end, largely via SDPR, despite UN calls to halt such sales.
Experts, including Vuk Vuksanović of King’s College London, note that Serbia’s motivations include revenue from drone sales and access to cutting-edge Israeli military technology. Israel, in turn, seeks to secure supply chains outside its volatile regional backyard.
Past contracts include advanced artillery systems and Hermes 900 combat drones worth $335 million, followed by a $1.6 billion deal for drones, long-range missiles, electronic warfare systems, and other equipment. The Serbian company Edepro has also exported military components to Elbit-owned IMI Systems since 2018.
Criticism and Investment Withdrawals
The partnership has sparked international concern. Countries and financial institutions have previously withdrawn investments from Elbit due to human rights concerns. Norway, Denmark, Sweden, and the UK have all divested or boycotted Elbit in the past, citing violations of international humanitarian law, including the construction of Israel’s separation wall in the West Bank.
Despite criticism, Elbit’s revenue reached $7.9 billion in 2025, a 16.3 percent increase from 2024, supported by ongoing global defense contracts. UN rapporteur Albanese described Serbia as “one of Israel’s strongest and most determined allies, without any shame,” a characterization the Serbian Ministry of Foreign Affairs called “inappropriate interference in our internal affairs.”
With the new drone factory, Serbia positions itself as both a technology partner and regional hub for Israeli unmanned systems, raising questions about the geopolitical and ethical dimensions of its defense strategy.
