Pakistan spends higher share of GDP on defence than India, China or EU

Pakistan's defence spending has been higher than India as a proportion of GDP

Pakistan has been outspending India over the past decade when it comes to defence expenditure as a proportion of GDP despite its worsening debt situation.

Though Pakistan’s defence spending as a proportion of GDP declined to 2.3 percent in FY25, it is still higher than India’s 2 percent, budget data of the two countries show.

A Moneycontrol analysis shows that between FY17 and FY25, India’s defence spending, including pensions, grew at a compounded annual growth rate of 8 percent. Pakistan’s defence budget expanded by 12.6 percent per annum during the period.

In value terms, India’s defence spending at Rs 6.4 lakh crore was seven-fold that of Pakistan at close to 1 lakh crore Indian rupees.

In FY25, Pakistan budgeted to spend Rs 2.8 lakh crore, including pensions.

The defence push

But India is not the only country that Pakistan outspends when it comes to GDP. Data from the World Bank shows that at 2.8 percent in 2023, Pakistan outspent its peers in the low- and middle-income group at 1.8 percent and lower middle-income group at 2 percent.

Pakistan spent more on defence than some of the other world powers. China and the European Union spent just 1.7 percent of their GDP on defence, a percentage point lower than Pakistan.

The gap between Pakistan’s and the world’s defence spending widened between 2010 and 2022.

While Pakistan spent just 0.5 percent more than the world average of GDP at 3 percent in 2010, the gap widened to 0.9 percent by 2015 and further to 1.5 percent in 2018, the year its ties with India began to worsen yet again.

While the gap has narrowed as Pakistan has fallen into economic hardships and war in two regions has escalated global spending, 2024 could mark a turnaround.

Data from Pakistan’s finance ministry shows that there was a 15.6 percent increase in Pakistan’s revenue budget on defence and a 115 percent jump in its development budget.

The ties between the two countries are expected to plunge further after 26 people, most of them tourists, were gunned down in a terror attack in Jammu and Kashmir’s Pahalgam.

The Resistance Front, a proxy of Pakistan-based Lashkar-e-Taiba, has claimed responsibility for one of the deadliest strikes against civilians in recent years.