Soldier Modernization Systems Market (2026-2036)

The growth of this market is mainly driven by rising global defense expenditure, large integrated soldier system programs in Europe and North America, the replacement of individual weapons and fire control systems, and the need to connect dismounted soldiers to digital battlefield networks. In addition, lessons from Ukraine on survivability and night operations, the adoption of augmented reality and mission command displays, and growing investment in soldier power, protection, and human performance technologies are further supporting the growth of this market.

The Soldier Modernization Systems Market, also referred to as the future soldier systems, integrated soldier systems, or dismounted soldier modernization market, comprises the weapons, protection, sensors, communications, power, and mobility equipment that armed forces provide to individual soldiers and small units to improve their lethality, survivability, situational awareness, and sustainability. The market includes individual and squad weapons and fire control systems; body armor, helmets, CBRN protection, clothing, and load carriage; soldier radios, mission command displays, navigation systems, and communication headsets; night vision devices, thermal sights, and target locators; soldier batteries and power management systems; and exoskeletons and health and performance monitoring systems, along with software, integration, training, and support services. The market ecosystem extends from component and subsystem suppliers to equipment manufacturers, general contractors and systems integrators, defense procurement agencies, and armed forces.

The dismounted soldier remains central to land operations, and modern conflicts have increased the demands placed on infantry units. Rising defense budgets are increasing investment in soldier equipment. According to the Stockholm International Peace Research Institute (SIPRI), global military expenditure reached a record USD 2,887 billion in 2025, an increase of 2.9% in real terms, with spending in Europe rising 14% to USD 864 billion and spending across Asia and Oceania rising 8.1% to USD 681 billion. Armed forces are moving from buying individual items of equipment toward integrated soldier systems that combine weapons, optics, radios, displays, and power into one networked system, and from equipping selected units toward equipping entire formations.

Germany has become one of the largest buyers of integrated soldier systems. In February 2025, Rheinmetall signed a framework contract with the Bundeswehr for the Infanterist der Zukunft - Erweitertes System (IdZ-ES), running to the end of 2030 with a maximum value of EUR 3.1 billion. In April 2026, the Bundeswehr placed a call-off worth around EUR 1.04 billion for 237 additional platoon systems and the modernization of existing systems, which will equip 8,600 additional soldiers and bring the Bundeswehr total to 353 platoon systems and more than 12,000 individual sets of equipment. Each platoon system comprises 35 individual soldier systems, and Rheinmetall coordinates more than 30 subcontractors as general contractor.

Suppliers to the IdZ-ES program are also receiving large orders. In July 2026, Thales announced a frame contract with Germany for optronic systems in the mid-four-figure range, including XTRAIM day/night sights and new-generation night vision systems that combine intensified and thermal imaging, with deliveries ramping to several hundred units per month from 2027. In December 2025, OCCAR signed a contract revision worth around EUR 1 billion with the THEON/HENSOLDT consortium for 100,000 additional night vision goggles for Germany.

In the U.S., the Army is replacing its individual weapons and fire control systems under the Next Generation Squad Weapon (NGSW) program. The FY2026 budget request provides for 16,154 SIG SAUER M7 rifles, 2,636 M250 automatic rifles, and 19,524 M157 fire control systems supplied by Vortex Optics and Sheltered Wings. The Army is also fielding the ENVG-B, of which L3Harris has delivered more than 20,000 units, and in April 2026, selected L3Harris, among several companies, for the Binocular Night Observation Device (BiNOD) program, worth up to USD 465 million.

Soldier digitization is shifting toward lighter, modular mission command systems. The U.S. Army launched the Soldier Borne Mission Command (SBMC) program after the Integrated Visual Augmentation System (IVAS), once expected to be worth up to USD 22 billion, faced criticism over weight and form factor. In September 2025, the Army awarded SBMC prototyping contracts worth more than USD 350 million to Anduril, Rivet, and Elbit Systems of America. Anduril tested its phase one systems with the 75th Ranger Regiment in August 2026 and plans to build 170 phase two prototypes, with a production decision possible in fiscal 2028.

Protection and communications remain core elements of soldier modernization. In June 2026, the U.S. Army and the Defense Logistics Agency placed delivery orders worth more than USD 40 million for Next Generation Integrated Head Protection System (NG-IHPS) helmets, with Team Wendy Ceradyne of Avon Technologies receiving the largest share. INVISIO, a supplier of soldier communication headsets and hearing protection, reported 2025 revenue of SEK 1,737.1 million and signed a five-year framework agreement worth up to SEK 365 million with the Dutch Ministry of Defense.

The war in Ukraine has shown how the battlefield has changed for dismounted soldiers. Drones with thermal cameras observe the battlefield around the clock, and Ukraine produced more than 4 million drones in 2025. Soldiers must be able to detect drones, operate at night, avoid electronic detection, and survive artillery and drone attacks, which is increasing demand for night vision, thermal sights, protection, low-signature communications, and counter-drone capabilities at squad level.

Demand is also expanding in Asia-Pacific and other regions. In October 2025, the Indian Ministry of Defence signed a contract worth Rs 659.47 crore with a consortium of MKU Limited and Medbit Technologies for image intensifier night sights for SIG 716 assault rifles, with over 51% indigenous content under the Buy (Indian-IDDM) category. Such programs reflect a broader trend of local production and technology transfer in soldier modernization procurement.

Supplier results reflect the strength of demand for soldier equipment. Exosens, a major supplier of image intensifier tubes for soldier night vision, reported 2025 revenue of EUR 468.2 million, up 22.1%, and is investing EUR 37 million to increase tube production by 40% by 2027. THEON International reported a backlog, including options, of around EUR 2.4 billion at the end of 2025, more than double the level at the end of 2024. Capacity expansion across the supply chain indicates that suppliers expect soldier modernization demand to remain strong through the forecast period.

The value of soldier equipment is also increasing as armed forces adopt more advanced systems. A modern soldier system may include a rifle with a digital fire control system, binocular or fused night vision, a data-capable radio, a heads-up display, a communication headset, a modular helmet and body armor, and a power management system. As a result, market value is expected to grow faster than the number of soldiers equipped, while integration and software add further value to each system.

This indicates that weight, usability, and soldier feedback are key factors in program decisions.

This points to the importance of localization and interoperability in Asia-Pacific procurement.