Brazil’s decision to deepen defence-industrial cooperation with Turkey is more than a bilateral security gesture. It signals a potential new corridor for technology transfer, co-production and export-oriented manufacturing between two large emerging-market economies seeking greater strategic autonomy at a time of protectionism, supply-chain fragmentation and rising military spending.
A Defence Call With Investment Implications
According to Lusa, Brazilian President Luiz Inácio Lula da Silva told Turkish President Recep Tayyip Erdoğan in an August 2026 phone call that Brazil intends to increase investment in the defence sector and encourage partnerships between companies from both countries. Brazil’s Planalto Palace said the two leaders also agreed to send a delegation to Turkey led by Defence Minister José Múcio Monteiro and Development, Industry, Trade and Services Minister Márcio Elias Rosa.
The timing matters. Lusa reported that the call followed parliamentary ratification in both countries of a Defence Industry Cooperation Agreement. Turkey’s Anadolu Agency separately said Erdoğan identified investment, trade and defence industry as priority areas in which deeper cooperation could benefit both economies. The two governments also agreed to create a vice-presidential Strategic Council to draft a broader roadmap for bilateral relations.
For investors, this moves the relationship beyond diplomacy. Defence cooperation agreements are often enabling instruments for industrial policy. They can support joint research, licensed production, export promotion, procurement coordination and technology transfer. They also create a framework in which private firms can test whether political intent is matched by procurement budgets, localization rules, export-control approvals and credible project pipelines.
Brazil’s Modernisation Drive Creates Demand
Brazil’s defence push is not starting from zero. Janes reported in September 2025 that Brazil’s proposed 2026 defence budget was BRL 141.9 billion, about USD 26.4 billion at the exchange rates cited, a 6.23 percent increase from the previous year. Janes said priority allocations included F-39E/F Gripen fighters and KC-390 airlifters for the air force, the SisGAAz maritime surveillance system, anti-ship missile development and submarine construction for the navy, and air-defence, cyber, artillery, armoured vehicle and border-monitoring projects for the army.
That spending is linked to Brazil’s wider Novo PAC investment programme. Janes said BRL 52.9 billion of the programme was directed toward defence, with BRL 28.9 billion allocated for 2023 to 2026 and BRL 24 billion for 2026 to 2030. The government’s stated objective is not only to equip the armed forces, but also to build domestic technological capacity.
This creates a classic emerging-market defence opportunity: demand is large, but politically conditioned. Foreign suppliers rarely win only by offering equipment. They need local industrial partnerships, maintenance and training capacity, financing structures, technology-sharing commitments and a credible understanding of public procurement rules. For Turkish companies, Brazil offers scale. For Brazilian firms, Turkey offers access to a defence ecosystem that has moved rapidly from import substitution to export growth.
Why Turkey Is an Attractive Partner
Turkey’s defence industry has become one of Ankara’s strongest industrial-policy stories. Anadolu Agency reported in January 2026 that Turkey’s defence and aviation exports exceeded USD 10 billion in 2025, with USD 9.87 billion in goods exports and USD 184 million in services. Haluk Görgün, head of Turkey’s Defence Industries Presidency, said new defence contracts grew by around 80 percent in 2025, compared with exports of USD 7.1 billion in 2024.
The momentum continued into 2026. Al-Monitor reported in August 2026 that Turkish defence and aviation exports reached USD 5.79 billion in the first seven months of the year, up 26.2 percent year on year, citing Görgün’s public statement. The same report noted that exports over the previous 12 months had reached USD 11.2 billion.
Turkey’s appeal lies in its product mix and political positioning. Turkish firms have gained visibility in unmanned aerial systems, armoured vehicles, missiles, naval systems and electronic warfare. Turkish drones in particular became internationally prominent after operational use in Ukraine, Libya, Azerbaijan and other theatres. At the same time, Turkey is not a traditional Western prime contractor, which can make it attractive to governments seeking alternatives to US or EU procurement channels.
That does not remove risk. Brookings wrote in June 2026 that Turkey’s defence-industrial expansion faces investor concerns around foreign-policy alignment, sanctions compliance, export controls, rule of law and domestic political trajectory. The Financial Times also reported in July 2026 that Turkey’s defence boom is drawing European interest, but that political mistrust and questions over technology self-sufficiency remain obstacles.
From Trade Imbalance to Industrial Partnership
The commercial base between Brazil and Turkey is expanding, but remains commodity-heavy. Lusa cited Brazil’s foreign trade platform as showing that Brazil exported USD 3.4 billion to Turkey between January and July 2026, up 29.6 percent from the same period in 2025, while imports from Turkey totaled USD 718.1 million. Brazil’s main exports to Turkey include soybeans, raw cotton, iron ore, unroasted coffee, maize, pulp and beef.
Trading Economics, using UN COMTRADE data, reported that Brazil’s exports to Turkey reached USD 4.14 billion in 2025, led by oil seeds, cotton, coffee, ores, live animals, pulp and meat. The pattern is clear: Brazil sells raw and semi-processed goods, while the next phase of bilateral growth depends on higher-value industrial channels.
Defence could become one such channel. Turkish media reports citing Brazil’s Tecnologia & Defesa have identified Otokar’s Tulpar tracked armoured vehicle and Baykar’s Bayraktar TB3 unmanned combat aerial vehicle as possible areas of discussion. These reports should be treated cautiously because the Planalto statement did not name specific platforms. Still, the reported interest fits Brazil’s known procurement priorities, especially the Brazilian Army’s armoured vehicle modernization.
Turkey Today reported in September 2025 that Otokar’s Tulpar had been shortlisted alongside BAE Systems’ CV90, General Dynamics European Land Systems’ ASCOD and Rheinmetall’s Lynx in Brazil’s New Tracked Armored Family Program. TurDef reported in April 2026 that Brazilian Army officials visited Otokar facilities to inspect Tulpar configurations. If such a programme advances, the investment question will be less about a simple sale and more about local assembly, supply-chain participation, intellectual property, maintenance infrastructure and export rights to third markets.
FDI Barriers Are Practical, Not Abstract
For foreign investors, the Brazil-Turkey defence opening is attractive precisely because it is complex. Defence investment requires navigating corporate establishment, licensing, procurement procedures, technology transfer obligations, customs treatment, tax incentives, personnel mobility and government relations.
In Turkey, the general investment regime is comparatively open. ICLG’s 2026 Turkey foreign investment review notes that Foreign Direct Investment Law No. 4875 provides equal treatment for foreign and domestic investors and shifted Turkey from a permission-based system to a notification-based framework. The Turkish Investment Office says Turkey attracted about USD 288 billion in cumulative FDI between 2003 and 2025.
But defence is not an ordinary sector. Export controls, military end-use restrictions, classified information rules and state-linked procurement procedures require careful structuring. White & Case’s 2026 review of Turkey’s FDI environment said Turkey posted stronger FDI performance in 2025, but investors still need to assess sector-specific approvals and national security sensitivities. PwC’s 2026 Turkey tax summary also notes that project-based incentives can support high-value, R&D-intensive investments that reduce import dependency and support technological transformation.
For a Brazilian or third-country company entering Turkey to pursue defence cooperation, market entry strategy would need to define whether the target is sales representation, a joint venture, licensed production, R&D collaboration or regional export operations. Incorporation and corporate structuring would determine whether the vehicle should be a wholly owned subsidiary, local partnership or special-purpose project company. Investment incentives work would be central if the project involves manufacturing, R&D, testing facilities or technology zones.
Legal and tax compliance would be equally important. Defence-related imports and exports can trigger customs classification issues, dual-use controls, sanctions screening and contractual restrictions on technology sharing. Government relations would matter because defence projects are negotiated within state-to-state frameworks as much as commercial tenders. Expo and trade-fair representation also has a role, since platforms such as SAHA Expo in Istanbul and LAAD Defence & Security in Brazil are where government delegations, prime contractors and suppliers often test market interest before tenders become formal.
Strategic Autonomy, But With Fiscal Limits
The political logic behind Brazil-Turkey defence cooperation is strategic autonomy. Both countries want larger roles in global governance, both seek more independent defence-industrial capacity, and both present themselves as voices of the Global South in a fragmented international order. Lula and Erdoğan also discussed Ukraine and the Middle East during their August 2026 call, according to Planalto, underscoring that defence cooperation is embedded in a wider diplomatic conversation.
Yet the fiscal and execution constraints are real. Brazil’s defence budget is large by regional standards, but procurement is often squeezed by personnel costs and long programme timelines. Turkey’s defence industry has export momentum, but its companies still face questions over financing, scale, certification, interoperability and access to sensitive subsystems. A partnership will succeed only if both sides can turn political statements into bankable projects.
That means investors should watch for four signals: the composition of the Brazilian ministerial delegation to Turkey, any named procurement or co-production projects, language on technology transfer and local content, and whether the new Strategic Council produces a timeline with responsible agencies. Without those details, the agreement remains a promising framework. With them, it could become a new investment channel linking Turkey’s defence manufacturers with Brazil’s procurement needs and industrial base.
What This Means for Foreign Investors
For international investors evaluating Turkey, the Brazil file shows how Ankara is using defence exports to deepen industrial relationships well beyond its immediate region. The opportunity is not limited to Turkish and Brazilian companies. Component suppliers, electronics firms, software developers, maintenance providers, testing specialists and logistics companies may all find openings if defence cooperation produces joint programmes.
The practical work is granular. Investors would need to assess market entry options, incorporate the right local entity, identify incentives for R&D or manufacturing, map legal and tax compliance requirements, manage government relations, use expos for partner validation, structure import-export processes and plan project execution on the ground. Those are the areas where an FDI advisory firm such as fdiconsultancy.com becomes relevant, not as a substitute for commercial strategy, but as the operational layer that helps investors turn a diplomatic opening into a compliant, executable investment plan.