By Wu Qiaoxi | 2025-08-18

With global demand for drones on the rise, Japan is using diplomatic aid to strengthen its position in the drone industry.

Japan's Official Security Assistance (OSA) program is providing small and medium-sized noncombat drones free of charge to friendly nations for missions such as maritime patrol and disaster logistics, Nikkei reported in August.

While the initial deliveries are free, the long-term goal is to cultivate future customers and promote sales to countries wary of the cybersecurity concerns around Chinese-made equipment.

Tokyo has compiled a drone catalog with input from private companies, listing about 20 models. These include ACSL's SOTEN small drone, Prodrone's PD6B-Type3 large logistics drone and Terra Labo's Terra Dolphin 4300 fixed-wing drone. Japanese drones are in demand because of their advanced technology, officials say.

Launched in 2023, the OSA program is unlike conventional development aid and is explicitly aimed at countering China's growing military presence in the region.

OSA exists "to prevent unilateral attempts to change the status quo by force, ensure the peace and stability of the Indo-Pacific region in particular, and create a security environment desirable for Japan" and to provide equipment and material support to like-minded countries "with a view to strengthening their security and deterrence capabilities," the Japanese Foreign Ministry says on the OSA page.

Aiding 8 countries

Through OSA, Japan plans to provide eight countries with defense equipment, including drones, in the 2025 fiscal year. The recipient nations include Thailand, Tonga, East Timor, Indonesia, Malaysia, Papua New Guinea, the Philippines and Sri Lanka, Kyodo News reported in June.

The move is part of an incremental push to gradually include more countries in the program "to help maintain stability in the Indo-Pacific region," the Foreign Ministry said, according to a June report in the Japan Times.

Japan will deliver 14 domestically made drones to Malaysia ahead of this year's ASEAN summit, and in May invited Malaysian military personnel to a week-long training program to ensure they can operate and maintain the equipment effectively.

Working with Taiwan

Taiwan is contributing to this effort to boost regional security.

The Taiwan Excellence Drone International Business Opportunities Alliance (TEDIBOA) is working with Japanese companies to expand into global markets and establish a supply chain independent of China. Using Chinese drones poses cybersecurity risks, Chuang Hsiu-mei, vice president of Taiwan's Aerospace Industrial Development Corp. and CEO of TEDIBOA, told Nikkei in July.

"The world is beginning to come to a shared understanding" on building production systems outside China, she said.

Japan still faces a major bottleneck in building an independent drone industry: China's predominance in making drones and parts. The Chinese firm DJI controlled about 70% of the global market in 2024, Berg Insight reported in April.

In addition, Chinese restrictions on exporting drone parts, imposed this year on grounds of national security, have underscored the vulnerability of existing supply chains.

Ambitious spending

At the same time, Japan is turning to foreign procurement to fill capability gaps quickly. For fiscal 2025, Tokyo allocated 41.5 billion JPY ($281.4 million) for US-made MQ-9B Sea Guardian drones.

Japan plans to spend more than 100 billion JPY ($678 million) in fiscal 2026 on additional drone acquisitions, Mainichi reported in August. Its procurement strategy emphasizes "preferring quantity to quality," which could lead to prioritizing Türkiye's Bayraktar TB2, a model that proved effective in the Russia-Ukraine war.

Japan reportedly is studying the possibility of using the TB2 and Israeli Heron MK II drones in a hybrid fleet, since their strengths are complementary.

Photos circulating online show a Heron bearing the Kawasaki Heavy Industries logo during test flights at Shirahama Airport.

With global demand surging, Japan's drone industry is projected to reach 498.7 billion JPY ($3.4 billion) in revenues in fiscal 2025 and exceed 1 trillion JPY ($6.8 billion USD) by 2030, effectively doubling within five years.

Japan's drone diplomacy serves both security and economic goals. Tokyo is seeking to shape a more favorable environment in the Indo-Pacific. The success of this strategy hinges on Japan's ability to reduce its reliance on China and secure a strong position in the global drone market.