As of May 2025, both India and Pakistan have released their national defence budgets for the 2024–25 fiscal year, reflecting their respective priorities amid changing geopolitical dynamics. Here’s a detailed comparison of their defence allocations and overall economic status.
India: Strong Focus on Modernization and Self-Reliance
Total Defence Budget: ₹6.22 lakh crore (~USD 75 billion)
India’s defence spending continues to be among the highest globally. In FY 2024–25, a significant portion of the budget is directed toward long-term modernization, infrastructure, and boosting indigenous production.
Key Allocation Segments:
Personnel Costs (Salaries & Pensions): ₹3.17 lakh crore, accounting for over half the total budget.
Capital Expenditure: ₹1.82 lakh crore dedicated to new acquisitions, weapons, aircraft, and modernization.
Operational & Maintenance Costs: ₹1.23 lakh crore to sustain daily defence operations.
Notable Developments:
Indigenous Procurement: Nearly three-fourths of the capital procurement budget is reserved for domestically manufactured defence equipment.
Big-Ticket Acquisitions: Includes fighter jets (Rafale-M), submarines, attack helicopters, and artillery systems.
Infrastructure Push: ₹7,146 crore earmarked for strategic roads and facilities along India’s borders.
Research Boost: The DRDO has received close to ₹27,000 crore to strengthen research and technology innovation.
Economic Snapshot:
Inflation Rate (April 2025): 3.16%, one of the lowest in recent years.
GDP Growth Forecast: Adjusted to 6.5% from 6.7% by the Reserve Bank of India.
Fiscal Deficit: Currently stands at 4.4% of GDP.
Positive Outlook: RBI is expected to transfer a significant surplus (up to ₹2.75 lakh crore) to the government, offering a fiscal cushion.
Pakistan: Rising Defence Budget Amid Economic Struggles
Total Defence Budget: PKR 2,122 billion (~USD 7.37 billion)
Pakistan has increased its defence budget by nearly 15% from the previous fiscal year, even while facing economic headwinds and ongoing IMF oversight.
Spending Overview:
Defence remains the second-largest expense after debt repayments.
Majority of funds support existing forces and imported equipment.
China remains Pakistan’s primary defence partner and supplier.
Economic Challenges:
Growth Performance: The actual GDP growth achieved was 2.38%, falling short of projections.
Inflation Target: Set at 12% for the upcoming year.
Budget Deficit: Estimated at 6.9% of GDP, putting added pressure on public finances.
Debt Burden: External debt totals over USD 131 billion, with major repayments owed to China and multilateral lenders.
Tax Revenue Target: The government aims to raise PKR 12,970 billion, a sharp increase over previous years.
India vs Pakistan: Quick Comparison
Conclusion
India’s defence strategy revolves around modernization, indigenization, and infrastructure development while keeping macroeconomic stability in check. On the other hand, Pakistan’s increased defence spending—despite economic constraints and growing debt—signals its commitment to maintaining military strength, though it poses significant fiscal challenges.
Both countries continue to prioritize defence, but their financial conditions and spending strategies reflect contrasting economic realities.
