Can debt-ridden Pakistan afford to hike its defence budget?

Pakistan is expected to raise its defence budget for the 2025-26 fiscal year. The country's Planning Minister, Ahsan Iqbal, confirmed the move over the weekend, citing tensions with India as the reason. This comes as Islamabad's total public debt has reached a staggering PKR 76 trillion (around $269 billion), as per its economic survey 2024-25. However, the country's defence spending remains dwarfed by India's read more
Chief of Army Staff of Pakistan Asim Munir holds a microphone during his visit at the Tilla Field Firing Ranges (TFFR) to witness the Exercise Hammer Strike, a high-intensity field training exercise conducted by the Pakistan Army's Mangla Strike Corps, in Mangla, Pakistan May 1, 2025. Inter-Services Public Relations (ISPR) via Reuters
Pakistan is increasing its defence budget amid recent tensions with India. The country's Planning Minister, Ahsan Iqbal, said on the weekend that the government will hike its defence budget for the 2025-26 fiscal year.
The move comes even as Pakistan remains debt-ridden and the country faces economic instability and high inflation. As Pakistan increases its defence budget, we take a look at how it compares with India's.
Pakistan to raise defence budget
Pakistan's Planning Minister Ahsan Iqbal confirmed on Saturday (June 7) that the government will increase the defence budget.
'It is our national duty to provide the armed forces with whatever they need in this budget to bolster their capacity and defend our country in the future. It has been proven that we have a dangerous neighbour (India) who attacked us in the night, but we gave them a befitting response,' he was quoted as saying by Pakistan's Dawn.
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Iqbal said the country must 'remain ready to respond if they attack again'.
The likely step comes amid Pakistan's economic woes. The country's economic survey 2024-25 revealed that Islamabad paid $7.8 billion in external debt service payments in the previous financial year.
A boy plays with a soccer ball next to a smouldering pile of rubbish, ahead of the World Environment Day, in Karachi, Pakistan, June 4, 2025. Reuters
The country is spending more than 1.9 per cent of its gross domestic product (GDP) on debt service payments, according to the survey.
Pakistan's total public debt has reached a staggering PKR 76 trillion (around $269 billion), almost double since 2020-21.
Of this, Islamabad owes $87.4 billion to other countries and multilateral agencies. Pakistan has to pay China $15 billion – the largest amount among bilateral lenders. This is followed by Japan at $3 billion and France at over $1 billion.
The Shehbaz Sharif government's decision to hike the military budget comes amid significant damage to Pakistani airbases and air defence systems in the strikes by India under Operation Sindoor in the wake of the Pahalgam terror attack.
Pakistan's military budget
Pakistan will unveil its annual budget for the coming fiscal year today (June 10), reported to be a PKR 17.6 trillion budget.
According to Reuters, analysts predict a rise of about 20 per cent in the country's defence budget. Pakistan had increased its defence budget by 16.4 per cent last year.
Pakistan allocated PKR 2.1 trillion for defence in the FY 2024-25, including $2 billion for equipment and other assets.
The country's military expenditure stood at $10.2 billion for 2024-25, data by Stockholm International Peace Research Institute (SIPRI) revealed.
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To counter India's technologically advanced forces, Islamabad has focused its defence spending on maintaining nuclear capabilities and expanding its missile systems.
Pakistan has an edge over India only in mobile rocket systems, 600 over New Delhi's 264, as per an Economic Times (ET) report.
India, Pak comparison
India has a bigger military than Pakistan and notably higher defence spending.
For the 2025-26 fiscal year, India set aside $78.7 billion for defence spending, a 9.5 per cent rise from the previous year.
India's military spending for 2024-25 was at $86.1 billion, as per SIPRI data. This makes the country the fifth-largest military spender in the world.
The world's most populated country's defence budget has grown in the past decade. In 2013, India's military spending was at $41 billion. This nearly doubled to $80 billion by 2024, as per data from Macrotrends.
India is seeking to enhance its defence capabilities by expanding the domestic production of weapon systems to reduce dependence on foreign suppliers. It has also enhanced its air power by making key purchases such as Rafale fighter jets.
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When it comes to manpower, India has 14.5 lakh active military personnel, as compared to its rival neighbour's 654,000.
India boasts 730 combat-ready aircraft, while Pakistan has 452 military aircraft.
India's military has 4,201 tanks and roughly 149,000 armoured vehicles, with Pakistan possessing only 2,627 tanks and 17,500 armoured units.
India's naval power is also superior to Pakistan's. The Indian Navy operates 293 vessels, including two aircraft carriers, 18 submarines, and 13 destroyers.
Pakistan, on the other hand, has 121 vessels but does not have aircraft carriers or destroyers.
With inputs from agencies

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