Pakistan hikes defense budget 20% following conflict with India, but overall spending is cut

Key Points

• Pakistan hikes defense spending 20% by allocating 2.55 trillion rupees for FY2025-26, up from 2.12 trillion rupees last year.
• The increase follows last month’s deadly conflict with India—including missile and drone strikes—that brought relations to their most serious breakdown since 2019.
• Overall government spending is cut by 7% to 17.57 trillion rupees ($62 billion) amid efforts to bolster economic performance against India.
• The new defense allocation surpasses funding for higher education, agricultural development, and climate risk mitigation, drawing criticism from opposition lawmakers.

ISLAMABAD (AP) — Pakistan Tuesday hiked defense spending by 20% following last month’s deadly conflict with India.

The government of Prime Minister Shehbaz Sharif announced the increase as part of the budget for the fiscal year 2025-26, in which overall spending will be cut by 7% to 17.57 trillion rupees ($62 billion).

Pakistan and India were pushed to the brink of war earlier this year after a gun massacre of tourists in Indian-controlled Kashmir, marking the biggest breakdown in relations between them since 2019.

Weeks of tension followed, culminating in missile and drone strikes that resulted in dozens of fatalities on both sides of the border.

Finance Minister Muhammad Aurangzeb said the government was allocating 2.55 trillion rupees ($9 billion) for defense compared with 2.12 trillion rupees in the previous budget.

India in February increased its defense spending by 9.5%.

Sharif told the Cabinet: “All economic indicators are satisfactory. After defeating India in a conventional war, now we have to go beyond it in the economic field as well.”

Opposition members of the National Assembly verbally abused Aurangzeb, chanting slogans, throwing scrunched-up copies of the budget at him, whistling, and banging their desks as he gave his address.

The coming year’s defense allocation is considerably more than the government’s expenditure on higher education, agricultural development, and mitigating climate-related risks, to which Pakistan is especially prone.