Pakistan Plans to Increase Defense Budget by 18 Percent

June 25, Kathmandu – Pakistan is preparing to raise its defense budget by 18 percent, reaching 3 trillion Pakistani rupees. The proposal for this defense budget increase was presented by the government to parliamentarians in the draft budget for the year 2026.

Pakistan’s Finance Minister Muhammad Aurangzeb stated that the increase in defense spending aims to strengthen the country amid regional uncertainties.

The new fiscal year in Pakistan begins on July 1. The government intends to have the budget proposal approved by parliament prior to that, with voting by members of parliament expected by the end of this month.

Analysts suggest that the rapid advancements in military technology across South Asia and emerging security challenges have led the Pakistani government to conclude that increasing the defense budget is necessary.

Security Dynamics in South Asia

Maria Sultan, a defense analyst based in Islamabad, explained that ongoing conflicts in Ukraine and the Middle East, coupled with last year’s tensions between the nuclear-armed neighbors India and Pakistan, have altered the mindset of military planners. This step by Pakistan is largely driven by these factors.

In May 2025, India launched ‘Operation Sindoor’ in response to a deadly attack on tourists in Pahalgam, Kashmir administered by India. Among the victims was a Nepalese national, Sudip Nyaupane from Rupandehi.

India accused the Pakistan-based group Lashkar-e-Taiba of orchestrating the attack. The United Nations has designated this group as a terrorist organization, and New Delhi has alleged it enjoys support from Islamabad. However, the Pakistani government has denied these claims.

India’s ongoing military modernization, including developments in drone technology, cyber capabilities, and advanced precision-guided weapons, has compelled Pakistan’s military planners to reassess their security strategy.

Both India and Pakistan claim all of Kashmir, though each controls only part of the region. This Muslim-majority area remains a sensitive geopolitical flashpoint between the two countries.

Clashes following the Pahalgam attack have increased concerns over strategic stability in South Asia and intensified debates regarding nuclear deterrence between the rival nuclear-armed nations.

Kamar Chima, Executive Director of the think tank Sunoobar Institute in Islamabad, said this conflict has demonstrated that nuclear weapons do not necessarily prevent conventional military conflicts prior to nuclear war.

Risk of Multi-dimensional Conflict

Chima noted that India’s continuous military upgrades and advancements in drone, cyber capabilities, and precision weaponry have forced Pakistani strategists to reevaluate their defense approach.

This challenge is not limited to the eastern border with India; Pakistan also has tense relations with Afghanistan, especially in regions such as Khyber Pakhtunkhwa and Balochistan.

In February, Islamabad declared an “open war” against Kabul following increased attacks by militants against civilians and security forces within Pakistan. Pakistan has repeatedly accused Afghanistan of failing to curb militant groups operating from its territory, allegations which Kabul has consistently denied.

How Pakistan’s Defense Budget Compares with India’s

Pakistan’s defense budget increase comes as the country seeks to fulfill conditions for a $7 billion International Monetary Fund (IMF) program. This program has helped Pakistan avoid a potential debt default following the economic crisis of 2022–23 and maintain overall economic stability.

India’s annual defense spending stands at around $86 billion, which is nearly eight times higher than Pakistan’s expenditure.

The Pakistani government aims to transition the economy from stability to growth through tax reforms, tariff restructuring, and promoting exports and investment. During consultations with the IMF, fiscal frameworks and revenue projections were key topics.

Pakistan’s economy was approximately $45.2 billion in the concluded fiscal year. India, although having a population about 5.7 times larger than Pakistan, has an economy over nine times bigger, with an estimated GDP of about $4.15 trillion.

A significant gap also exists between the defense budgets of the two nuclear-armed neighbors. India’s annual defense expenditure is approximately $86 billion—about eight times Pakistan’s budget.

Pakistani military spokesperson Ahmad Sharif Chaudhry acknowledged this disparity during an interview with American news outlet Bloomberg last year, stating, “We don’t have unlimited resources to spend. Pakistan’s defense budget is only a small fraction of the neighboring country’s budget.”

Balancing Economic Pressure with Security Priorities

Economist and columnist Khurram Hussain explains that Pakistan has prioritized defense spending even amid economic hardships.

He said, “Maintaining balance under the current IMF program is extremely sensitive for the government. However, the IMF understands the realities and knows defense spending is non-negotiable, which is why they press for reforms in other areas.”

Some economists and political analysts warn that if provinces or local governments bear a significant share of the financial burden, development priorities could be affected.

Farooq Saleem, an economist in Islamabad, commented, “Pakistan has always mobilized resources for security deemed essential. The important question is, will political consensus to support such decisions persist once provinces directly feel the impact?”

Pakistani parliamentarians are expected to vote on the proposed defense budget increase by the end of this month. The new fiscal year begins July 1, and the government aims to have the budget approved before that date.