Pakistan’s Defence Budget Increase: Should India be Concerned?
Sen Chanu | 24 June 2025
Summary
On 10 June 2025, the Pakistani government released a new budget plan for 2025, which includes a 17% hike in defence spending. With the recent military escalation between India and Pakistan, this budgetary enhancement signals Pakistan’s commitment to military modernisation despite the country’s ongoing economic difficulties. During the budget allocation, Prime Minister Shehbaz Sharif announced that the country must “excel in the economic sphere” after “victory over India.” This announcement reflects Islamabad’s confidence in its military capabilities and a desire to maintain this confidence through enhanced spending.
The new defence budget provides new opportunities for the country’s military modernisation across air power, missile defence systems, and nuclear capabilities. In the recent development, Pakistan will acquire China’s fifth-generation J-35 fighter jets, marking China’s first export of this advanced aircraft. This acquisition will allow advanced stealth capabilities that will detect, track, and neutralise threats that are unattainable with the current fleet. Pakistan’s National Aerospace Science and Park and Türkiye’s Baykar are assembling YIHA-III drones domestically, aiming to produce a unit in two to three days. Hence, the procurement of loitering munition will increase, which will enhance the reconnaissance capabilities of the Pakistani Army. With the increased budget, Pakistan’s collaboration in the defence sector with Türkiye and China will expand further, enhancing its deterrence against India.
While the Indian defence budget (2025-2026) of GBP 58.8b (USD 78.7b) is almost nine times the Pakistani defence budget of GBP 6.6 b (USD 9b), the qualitative improvements in Pakistan’s stealth technology and missile defence will undermine some of India’s conventional advantages. Pakistan’s decision to acquire fifth-generation fighter jets will pose an unprecedented threat to some degree for New Delhi if a new conflict arises. This calls for India to adjust its traditional defence setting, especially its air defence strategy. A strategic response from India will mark a substantial shift in South Asia’s defence capabilities that will influence defence procurement decisions.
A response from India will likely focus on air superiority fighters and missile capabilities. India’s chief of defence staff, Anil Chauhan, declared that an unspecified number of Indian fighter jets were shot down during the recent confrontation between India and Pakistan. This acknowledgement indicates a tactical setback that necessitates an upgrade in India’s air power, especially stealth technology and missile detection systems. Pakistan’s deepening partnership with China is a two-front challenge for India. This partnership further demands military alignment between India and countries like the United States to balance out the China-Pakistan partnership. For India, a shift towards an alignment strategy is inevitable to improve its military power.
Pakistan’s new defence allocation cuts down other essential allocations, crucial for long-term economic return, such as agricultural advancement, energy development, and climate initiatives. The new budget suggests that Islamabad sees military advancement as a priority for the country’s survival, even at the expense of its key economic drivers. Therefore, India should recalibrate its defence strategy to match the qualitative improvement of Pakistan’s new defence acquisitions while tracking the evolving and deepening partnership between Pakistan and China.
China News Service/Wikimedia Commons, CC BY 3.0
Forecast
Short-term (Now - 3 months)
Medium-term (3-12 months)
Long-term (>1 year)
