Europe & CIS Infrared Search & Track (IRST) System Market – Segmented By Component (Scanning Head, Processing Unit, Control & Display Unit), By End User (Civil, Defense), By Platform (Airborne, Naval, Land, Others), By Country, Competition, Forecast & Opportunities, 2020-2030F

Market Overview:

Europe & CIS Infrared Search & Track (IRST) System Market was valued at USD 421.47 Million in 2024 and is expected to reach USD 588.11 Million by 2030 with a CAGR of 5.71% during the forecast period. Europe & CIS Infrared Search & Track (IRST) System market is gaining traction as defense forces emphasize non-radar-based detection technologies to counter stealth threats and electronic warfare tactics. Growth drivers include the rising importance of passive detection systems that can track low-observable targets, increased investments in upgrading aircraft and naval platforms with modern situational awareness tools, and the adoption of infrared technologies to enhance surveillance and targeting capabilities without compromising stealth. Advancements in sensor resolution, integration with AI-driven analytics, and compatibility with multi-domain defense systems are reinforcing the market’s potential, creating opportunities for defense contractors and system integrators to deliver cutting-edge solutions that enhance survivability and mission effectiveness.

Market Drivers

Growing Defense Spending

Rising defense budgets are one of the most significant forces fueling the demand for IRST systems. With nations placing greater emphasis on strengthening their military capabilities, a substantial portion of these budgets is being allocated to the development and procurement of advanced surveillance and detection technologies. IRST systems are gaining priority because they offer passive tracking solutions, which are highly valuable against stealth aircraft and advanced missile threats that traditional radar systems may struggle to detect. The allocation of funds towards modernization programs allows for large-scale integration of IRST technologies into new and existing fighter jets, helicopters, and naval platforms. This rise in expenditure is also facilitating collaborative projects between defense contractors and research organizations, accelerating innovation in infrared sensor sensitivity, long-range tracking, and target classification. For instance, in 2024, EU states spent $370B on defence, up 19% from 2023 and projected at $412B in 2025. Investments reached $115B, with $95B for equipment, expected to top $108B in 2025. R&D rose to $14B and should hit $18B in 2025. The defence industry generated $172B turnover, $62B exports, and 627K jobs in 2023. EU programmes added $9.5B via the Defence Fund, $1.8B for mobility, $300M for joint procurement, $500M for ammunition, and a planned $1.6B under EDIP by 2027, with 2,500 SMEs central to supply chains.

Increasing Focus on Air Force Modernization

Air force modernization is another major factor driving the adoption of IRST systems. Modern air combat scenarios require a combination of stealth, agility, and advanced detection tools, and this has placed infrared search and track systems at the core of aircraft upgrade programs. Defense organizations are equipping both existing and new aircraft with IRST technology to enhance situational awareness, enabling pilots to identify and engage threats more effectively in radar-denied environments. This modernization wave is not only about integrating advanced avionics and weapon systems but also about ensuring survivability against adversaries that are deploying stealth platforms. IRST’s ability to operate passively without emitting signals makes it a critical element in securing air superiority while avoiding detection. As air forces replace or upgrade legacy fleets, IRST solutions are being embedded as standard components in next-generation fighters, unmanned aerial vehicles, and reconnaissance aircraft. For instance, European Defence Fund allocated $1B to 62 projects spanning drones, unmanned systems, hypersonic defense, AI, and rotorcraft. Major awards: $110M ENGRT II, $55M iMUGS2, $31M Eurosweep, $85M hypersonic defense, $39M Scepter, $38M Beast, $52M Citadel Range, $33M Fasett2, and $32M Ninja2. SMEs secured 27% of funding, Ukraine joined for the first time, and EDF has spent half of its $8.8B 2021–2027 budget.

Integration of Advanced Sensor Technologies

IRST systems are benefiting from breakthroughs in sensor technologies, such as high-resolution infrared detectors, cooled and uncooled IR arrays, and improved signal processing algorithms. These advancements increase the accuracy, range, and reliability of detection, making IRST viable for complex operational environments. Integration with AI and machine learning further enhances tracking and threat classification capabilities, allowing automated identification of multiple targets simultaneously. Modern sensor fusion techniques enable IRST to work seamlessly with radar, electronic warfare systems, and navigation platforms, ensuring coordinated operations across multiple defense systems. Defense agencies are investing heavily in these technologies to maintain battlefield superiority, pushing the adoption of next-generation IRST systems. For instance, Germany is set to launch a multi-billion dollar defense procurement drive, including an order for 20 Eurofighter jets ($4.6–$5.7B), up to 3,000 Boxer armored vehicles ($11.5B), and around 3,500 Patria infantry fighting vehicles ($8B), with deliveries planned over the next decade. The defense budget will rise to $95.8B in 2026, supported by exemptions from debt limits, while additional purchases will cover IRIS-T air defense systems and hundreds of SkyRanger drone-defense platforms. The initiative under Chancellor Friedrich Merz aims to build Europe’s strongest conventional force and meet NATO’s 3.5% of GDP defense spending goal by 2029.

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Key Market Challenges

High Development and Procurement Costs

IRST systems involve sophisticated infrared sensors, advanced electronics, and complex integration processes, resulting in high development and procurement costs. Defense budgets must accommodate these expenses while balancing other operational priorities. High costs can limit adoption, particularly for smaller platforms or fleets requiring multiple systems. Moreover, research and testing cycles are extensive, requiring significant investment in R&D to achieve desired performance levels. Cost constraints can also slow down deployment, as programs need to justify the system’s value relative to other surveillance or targeting technologies. For manufacturers, maintaining cost efficiency while advancing sensor capabilities is a persistent challenge, making pricing and procurement strategies critical to market growth.

Operational and Environmental Limitations

IRST performance can be affected by environmental conditions such as fog, heavy rain, or high humidity, which can reduce infrared detection range and accuracy. Thermal clutter, temperature fluctuations, and background noise in complex operational settings further complicate reliable target identification. Integration across multiple platforms introduces technical challenges, including ensuring seamless data sharing with radar and electronic warfare systems without latency. Operational effectiveness requires extensive testing under diverse conditions, which is time-consuming and resource-intensive. Overcoming environmental and integration limitations is essential to ensure consistent system performance, making these factors a notable barrier for widespread adoption.

Key Market Trends

Miniaturization and Lightweight Designs

The market is witnessing a shift toward smaller, lighter IRST systems suitable for integration on compact platforms, including unmanned aerial vehicles and tactical aircraft. Miniaturization reduces weight, power consumption, and aerodynamic impact, allowing for broader deployment across different platforms. Despite smaller size, sensor performance continues to improve through advanced materials, electronics, and signal processing. Lightweight designs also simplify retrofitting on older systems without extensive structural modifications. The trend supports increased adoption in multi-platform operations and aligns with modern warfare strategies emphasizing mobility, efficiency, and adaptability.

AI-Driven Target Recognition

Artificial intelligence and machine learning are being incorporated into IRST systems to enhance automated target detection, tracking, and classification. AI algorithms improve accuracy by filtering background noise, predicting target movement, and distinguishing between friend, foe, and neutral objects. Integration with AI enables real-time analysis of multiple targets simultaneously, reducing operator workload and decision-making time. This trend also supports predictive maintenance, data analytics, and operational simulation, making IRST systems more intelligent and adaptive. AI-driven capabilities are becoming a standard feature in next-generation systems, pushing the market toward smarter, more autonomous solutions.

Multi-Spectral and Sensor Fusion Integration

IRST systems are increasingly being integrated with other sensor technologies, including radar, electronic warfare systems, and electro-optical sensors, to create a unified detection network. Multi-spectral solutions improve target detection under diverse environmental conditions and against low-observable threats. Sensor fusion enables seamless sharing of data across platforms, enhancing situational awareness and operational coordination. This trend drives development of interoperable systems capable of supporting network-centric warfare and real-time threat assessment. The adoption of integrated sensor networks strengthens operational capabilities, making this trend a key influence on market growth.

Segmental Insights

End User Insights

In 2024, the defense segment dominated the Europe & CIS Infrared Search & Track (IRST) System market, driven by growing demand for advanced situational awareness and threat detection capabilities across air and naval platforms. Military forces increasingly prioritize passive surveillance technologies that can detect low-observable aircraft, missiles, and unmanned aerial systems without revealing the platform’s location. The integration of IRST with advanced sensors, AI-assisted target tracking, and multi-domain defense systems has enhanced operational efficiency, accuracy, and real-time decision-making. Airborne platforms, including fighter jets and reconnaissance aircraft, represent a major deployment area, while naval vessels are adopting IRST for perimeter defense and threat monitoring in complex maritime environments. Defense budgets are heavily focused on modernization programs, prompting retrofitting of legacy platforms with IRST capabilities to extend operational life and improve combat readiness. In March 2025, Germany announced a $16 billion plan for six F127 frigates to replace aging F124 ships, featuring AEGIS, AN/SPY-6 radar, 64 VLS cells, and modular “flex zones” for drones. This forms part of a €500 billion ($545 billion) defense and infrastructure package to strengthen Germany’s defense capabilities.

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Country Insights

In 2024, Germany emerged as the dominant region in the Europe & CIS Infrared Search & Track (IRST) System market, driven by significant defense modernization initiatives and substantial investments in advanced surveillance technologies. The German military emphasizes upgrading airborne and naval platforms with high-performance IRST systems capable of detecting low-observable aircraft, missiles, and unmanned aerial vehicles. Integration with multi-sensor networks, AI-based target tracking, and electronic warfare systems has enhanced operational effectiveness and situational awareness. Budget allocations for next-generation fighter programs, naval defense upgrades, and advanced reconnaissance platforms have further reinforced Germany’s leading position.

Russia represents the second-largest market in 2024, driven by extensive fleet modernization programs and strategic emphasis on strengthening aerial and maritime defense capabilities. Russian defense platforms are increasingly equipped with IRST systems to improve detection of stealth targets and unmanned systems, enhancing overall operational readiness. Investments in advanced infrared sensors, long-range detection capabilities, and multi-platform integration have supported high adoption rates. The emphasis on upgrading legacy fleets with modern IRST technology has contributed to steady market growth, reinforcing Russia’s position as a major regional player.

Recent Developments

• ​In October 2024, TurDef compared three leading twin-engine fighters: the Eurofighter Typhoon, Dassault Rafale, and Boeing F-15EX. The Eurofighter excels in air superiority and multirole missions, the Rafale offers versatile multirole capabilities including nuclear strike, and the F-15EX provides extended range, heavy payload, and advanced avionics as a cost-effective alternative to fifth-generation fighters.
• In 2023, Hensoldt and ERA partnered to develop an advanced passive air surveillance and defense system for the German Luftwaffe, combining Twinvis passive radar with VERA-NG to provide stealthy, long-range detection. The integrated solution enhances situational awareness without revealing its presence and is designed for potential adoption by other European customers seeking advanced passive surveillance capabilities.
• In June 2025, Sweden signed a $900 million contract to acquire seven IRIS-T SLM medium-range air defense systems under the European Sky Shield Initiative, with deliveries starting by mid-2028 and full deployment planned by 2030 to enhance national and multinational air defense capabilities.
• In September 2024, Germany deployed its first IRIS-T SLM medium-range air defense system at Todendorf, strengthening national defense and supporting the European Sky Shield Initiative. The system, with proven effectiveness in Ukraine, addresses gaps in Germany's air defense and enhances missile interception capabilities.

Key Market Players

• Leonardo S.P.A.
• Thales Group
• Rheinmetall AG
• Aselsan A.S.
• Safran S.A.
• Lockheed Martin Corporation
• Northrop Grumman Corporation
• HGH Systèmes Infrarouges
• Tonbo Imaging Private Limited
• Raytheon Technologies Corporation 

Report Scope:

In this report, Europe & CIS Infrared Search & Track (IRST) System Market has been segmented into the following categories, in addition to the industry trends which have also been detailed below:

•           Europe & CIS Infrared Search & Track (IRST) System Market, By Component:

o    Scanning Head

o    Processing Unit

o    Control & Display Unit

•           Europe & CIS Infrared Search & Track (IRST) System Market, By End User:

o    Civil

o    Defense

•           Europe & CIS Infrared Search & Track (IRST) System Market, By Platform:

o    Airborne

o    Naval

o    Land

o    Others

•           Europe & CIS Infrared Search & Track (IRST) System Market, By Country:

o    Germany

o    Russia

o    France

o    Spain

o    Italy

o    United Kingdom

o    Poland

o    Rest of Europe & CIS

Competitive Landscape

Company Profiles: Detailed analysis of the major companies presents in Europe & CIS Infrared Search & Track (IRST) System Market.

Available Customizations:

Europe & CIS Infrared Search & Track (IRST) System Market report with the given market data, Tech Sci Research offers customizations according to the company’s specific needs. The following customization options are available for the report:

Company Information

• Detailed analysis and profiling of additional market players (up to five).

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