Breaking down Pakistan’s $9.3B defense budget

Who gets what in Pakistan's upscaled defense budget for this year?

Finance Minister Muhammad Aurangzeb announced on Tuesday a 20% increase in the defense budget in the wake of Pakistan’s recent military confrontation with India.

A total of PKR 2.55 trillion ($9.27 billion) has been earmarked for 2025-26.

Amping air power

According to the budget documents, the Pakistan Army will receive PKR 1.165 trillion ($4.24 billion) in the upcoming fiscal year. This is a 15.4% increase from the previous year’s allocation of PKR 1.09 trillion. The revised expenditure for the army in the current year is expected to reach PKR 1.058 trillion.

The Pakistan Air Force is set to receive PKR 520.74 billion ($1.81 billion), compared to PKR 451 billion last year. This reflects a 15.5% increase in funding. The significant boost suggests a focus on strengthening aerial defense capabilities, particularly in light of the recent use of fighter jets, drones, and air defense systems during the clashes with India.

For the Pakistan Navy, the allocation is PKR 265.97 billion ($0.97 billion), up from PKR 230 billion last year. This represents a 15.6% increase in naval spending. Revised expenditure estimates indicate the Navy will spend about PKR 238 billion this year.

The total defense budget now accounts for roughly 14.5% of Pakistan’s overall federal budget, even as the government has proposed a 7% reduction in total federal expenditure, bringing it down to PKR 17.57 trillion.

Comparing India

In comparison, India has also raised its defense budget for 2025–26 to $78.7 billion, a 9.5% increase, including $21 billion earmarked specifically for new equipment.

Despite tightening public finances, the sharp rise in defense allocations underscores the strategic priority being placed on national security.

This defense spending increase comes after a serious four-day military exchange with India, sparked by a deadly April attack on tourists in Indian-administered Kashmir. India accused Pakistan-based militants of carrying out the assault, a claim Islamabad denies. The military confrontation in May, which involved the use of jets, missiles, drones, and artillery, was the most intense in nearly three decades.

Pakistan’s government has framed the episode as a military success, which may partly explain the emphasis on defense in this year’s budget.

The higher defense budget and the broader fiscal strategy are also aimed at meeting the requirements of an ongoing International Monetary Fund (IMF) program.