Pakistan’s coalition government has decided to increase its defence spending by 18% to over Rs 2.5 trillion in the upcoming 2025–26 budget, in direct response to escalating tensions with India following the Pahalgam terror attack on April 22, which claimed 26 lives. This increase, reported by The Express Tribune, reflects growing security concerns and signals a sharpened military posture amid bilateral fallout.
The Pakistan Muslim League-Nawaz (PML-N) government, in consultation with its key coalition partner, the Pakistan People’s Party (PPP) led by Bilawal Bhutto Zardari, reached a consensus on boosting the military allocation. This hike follows previous increases:
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FY 2023–24: Rs 1.804 trillion
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FY 2024–25: Rs 2.122 trillion (14.98% rise)
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FY 2025–26 (proposed): Over Rs 2.5 trillion (18% rise)
This makes defence the second-largest expenditure after debt servicing, which has been allocated Rs 9.7 trillion in the current fiscal. However, due to an 11% cut in Pakistan’s policy interest rate, the overall budget size will be slightly reduced from the current year’s Rs 18 trillion framework.
The budget announcement is expected in the first week of June, ahead of the new fiscal year beginning July 1.
These developments follow a series of retaliatory moves by both countries:
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India suspended the Indus Waters Treaty, closed the Attari land border, and downgraded diplomatic relations.
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In return, Pakistan shut its airspace to Indian aircraft and suspended bilateral and third-party trade.
Additionally, Pakistan has ramped up its missile readiness:
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May 6: Successful test of Fatah-series surface-to-surface missile (range: 120 km)
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May 3: Test launch of Abdali Weapon System (range: 450 km)
These tests suggest an intent to display military preparedness and deterrence capability as the standoff deepens.
