Malaysian Defence Industries (MDI) spurred in 1972 with the privatisation of SME Ordnance and AIROD. The government has had a relatively enormous defence allocation to increase the MAF's readiness and resilience of defence. However, the defence industry in Malaysia has experienced various problems and challenges over the past few years. These problems and challenges have negatively impacted the development of the local defence industry, where many new acquisitions for MAF military assets are affected. Therefore, this article aims to identify and analyse the challenges in the local defence industry. The methods used are based on qualitative methodology through semi-structured interviews with prominent personnel directly involved in the national defence industry. Existing literature and official documents on the implementation of the defence industry worldwide are also studied. Content and thematic analysis were applied to analyse, interpret, and group the findings into four themes of challenges: policy direction, implementation, governance and leadership. This article attempts to fill the gap in challenges that arise in implementing the defence industry in Malaysia from the perspective of the government and local defence companies. Also, several recommendations are highlighted to overcome this gap related to the opportunity for industry improvement.
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