Islamabad: Pakistan announced this week that it is raising its defense spending by a steep 20 per cent. The government of Prime Minister Shehbaz Sharif presented a budget that allocated 2.55 trillion rupees ($9 billion) for defense spending in FY26, compared to 2.12 trillion in the fiscal year ending this month. This comes after the country suffered serious setbacks from Indian strikes during Operation Sindoor.
Pakistan's allocation of 2.12 trillion rupees ($7.45 billion) for defense in the outgoing fiscal year included $2 billion for equipment and other assets. An additional 563 billion rupees ($1.99 billion) was set aside for military pensions, which are not counted within the official defence budget. Meanwhile, it is shrinking overall spending by 7% to 17.57 trillion rupees ($62 billion).
Pakistan’s growth lags far behind the region. In 2024, South Asian countries grew by an average of 5.8%, and 6.0% growth is expected in 2025, according to the Asian Development Bank.
India's defense spending in its 2025-26 (April-March) fiscal year was set at $78.7 billion, a 9.5% increase from the previous year, including pensions and $21 billion earmarked for equipment. This is almost nine times more than Pakistan's defence budget for FY26. India has indicated it will step up expenditure following the conflict with Pakistan.
