Australia to start production of the Kongseberg Naval Strike Missiles, which has being denied to Malaysia

HMAS Sydney fires Royal Australian Navy’s first Naval Strike Missile during a SINKEX off the coast of Oahu, Hawaii as part of Exercise Rim of the Pacific (RIMPAC) 2024. Credit: LSIS Daniel Goodman, Defence Australia

Kongseberg Defence and Aerospace has been making the news in recent weeks as its Naval Strike Missile (NSM) and Joint Strike Missile (JSM) derivative gathers increasing popularity around the world, but this has also highlighted the current issues nations such as Australia are facing with America's increasingly restrictive International Traffic in Arms Regulations (ITAR).

On 14 May 2026, Australia announced a Memorandum of Understanding (MoU) with the Norwegian government to domestically manufacture the NSM and JSM in Australia, making Australia a regional missile production and support hub for the popular cruise missile.

This MoU will see Australia invest A$850 million to set up production and maintenance facilities in Newcastle, New South Wales, from 2027, and contribute to Australia’s push for self-reliance in defence.

The Royal Australian Navy (RAN) selected the NSM to replace its obsolete Harpoon Block II ASMs on its major surface combatants in 2022, and the first NSM system was integrated on the Horbat-class destroyer HMS Sydney by June 2024. The Royal Australian Air Force (RAAF) ordered the JSM in September 2024.

Germany orders more JSM

F-35A launching JSM. Credit: Kongsberg

Following up on the Australian announcement, Kongsberg announced a follow-up order for the JSM with Germany, worth NOK3.5 billion (about USD377 million). JSM is a critical system for the F-35, as it is currently the only precision-strike missile that fits the F-35A/C's internal weapons bay.

Norway revokes Malaysia's export license for NSM, citing new export controls

Naval Strike Missile. Credit: Kongsberg

Malaysia was the fifth country to order the NSM in 2018 and is now seeking compensation of US$250 million for its NSM export licence after the Norwegian government revoked its export license, citing new export control measures.

The NSM was selected in 2018 as the main anti-ship missile system of the much-delayed Maharaja Lela-class Littoral Combat Ships (LCS), and Malaysia has paid 95% of the contract value. According to USNI News, Norwegian officials informed the Malaysian Defence Minister Khaled Nordin that new export controls have limited NSM sales to NATO and NATO partner nations, and Malaysia is not a NATO partner nation, unlike Australia.

USNI News also speculates that the NSM uses a US-made gyroscope component that is subject to US International Traffic in Arms Regulations (ITAR), which has become increasingly restrictive and "America First" in recent years, which is one of the reasons why Australia is investing in its defence industry, so it is rather ironic that in the same week the NSM contributes to Australia's quest for defence self-reliance, it also hampers Malaysia's self-defense.