The Pakistani government presented a draft budget to lawmakers last week, increasing defense spending by 18% to Rs 3 trillion ($10.8 billion).
Pakistan’s Finance Minister, Muhammad Aurangzeb, said the increase was aimed at making the country “invulnerable to uncertainty in the region”. Analysts say the key considerations are evolving military technologies and emerging threats.
“Future conflicts will no longer be limited to two adversaries,” said Maria Sultan, an Islamabad-based defense analyst. “They will be shaped by weapons and technology coming from multiple nations, fought simultaneously in the land, air, cyber and electronic domains.”
A changing security environment
Sultan told DW that the wars in Ukraine and the Middle East, as well as last year’s India-Pakistan conflict — which brought the nuclear-armed neighbors to the brink of all-out war — have reshaped the thinking of military planners.
In May 2025, New Delhi launched “Operation Vermillion” in retaliation for a deadly mass shooting in Pahalgam, a popular resort town in Indian-administered Kashmir, in which at least 26 mostly Indian Hindu tourists were killed.
India said the Pakistan-based group Lashkar-e-Taiba, considered a terrorist organization by the United Nations, carried out the attack. New Delhi also accused Islamabad of supporting the group, while the Pakistani government denied the allegation.
Both India and Pakistan claim all of Kashmir, but each country only controls a portion of the territory, making the Muslim-majority region a flashpoint in the larger India-Pakistan geopolitical rivalry.
The clashes following the Pahalgam attack raised concerns about strategic stability in South Asia and sparked debate about the limits of nuclear deterrence between rival nuclear powers.
Qamar Cheema, executive director of the Sanobar Institute, an Islamabad-based think tank, said, “The conflict demonstrated that nuclear weapons do not necessarily prevent conventional conflict below the nuclear threshold.”
Threat of war on many fronts
According to Cheema, Pakistan’s military planners are grappling with the security environment created by India’s continued military modernization and the growing role of drones, cyber capabilities and precision-guided weapons in modern warfare.
The challenge is not limited to Pakistan’s eastern border with India.
Islamabad is also embroiled in conflict with neighboring Afghanistan, particularly over its western provinces of Khyber Pakhtunkhwa and Balochistan.
Following an increase in terrorist attacks on civilians and security forces inside Pakistan, in February Islamabad declared it was in “open war” with Kabul.
Pakistan has repeatedly accused Kabul of failing to stop terrorist groups from carrying out attacks on Pakistan from Afghan territory. Kabul rejects those claims.
Pakistan’s defense budget outweighs India’s!
The increase in spending also comes as Islamabad continues to meet the conditions of a $7 billion International Monetary Fund (IMF) program to help the country avoid default and restore macroeconomic stability after Pakistan’s 2022-23 economic crisis.
The government aims to transform the Pakistani economy from stagnation to growth through tax reforms, tariff rationalization and measures to promote exports and investments. The IMF held pre-budget consultations with Pakistani officials, with the country’s fiscal framework and revenue assumptions at the center of program-related talks.
Pakistan’s economy grew to about $452 billion in the fiscal year ending in June. While India’s population is much larger, with about 5.7 times more people than Pakistan, this data indicates that its GDP is nine times larger than Pakistan’s – about $4.15 trillion.
There is a similar disparity between the defense budgets of the two nuclear rivals. India’s annual defense expenditure is estimated at around $86 billion – almost eight times that of Pakistan.
Pakistan Army spokesman Ahmed Sharif Chaudhry acknowledged the difference.
“We don’t have the luxury of unlimited money,” he told US-based Bloomberg, adding that Pakistan maintains a military budget that is “a fraction” of its neighbour.
Columnist and economic commentator Khurram Hussain said Pakistan has historically prioritized defense spending – even during times of economic stress.
“Under the current IMF programme, it is a delicate balancing act for the government, but the IMF also understands the ground realities, and I think they know that defense expenditure cannot be compromised, so they push for more reforms in other areas,” Hussain said.
Fiscal stress outweighs security priorities
Some economists and political observers argue that development priorities may eventually come under pressure if provinces are expected to absorb a larger share of the fiscal burden.
“Pakistan has always looked for ways to finance what it sees as essential security needs,” said Farooq Saleem, an Islamabad-based political economist.
“The more difficult question is whether the political consensus required to maintain those options remains intact when provinces begin to feel the trade-offs more directly.”
Pakistani lawmakers are expected to vote on increased defense spending later this month, with the government hoping to get their support before the next fiscal year begins on July 1.
Edited by: Keith Walker