India, June 11 -- The Pakistan government has proposed an outlay of 2.55 trillion Pakistani rupees or more than $9 billion as the defence budget for fiscal 2025-26, marking the highest annual increase (20.2% over the last fiscal) in military spending in more than a decade. This comes at a time when the country is grappling with a host of economic issues, including dwindling foreign exchange reserves, a balance of payments crisis and perpetual reliance on handouts from international financial institutions and benefactors such as China.

Officials in Islamabad have justified the enhanced defence spending by pointing to tensions with India and New Delhi's targeted military strikes on terrorist infrastructure within Pakistan in May. However, ...