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Pakistan military offers to cut defence budget amid severe financial crisis

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Pakistan military offers to cut defence budget amid severe financial crisis

[vc_row][vc_column][vc_column_text]Amid a severe financial crisis in Pakistan, its military, in what media reports dubbed “an unprecedented move”, has voluntarily decided to cut the defence budget before Prime Minister Imran Khan’s government presents its budget for the fiscal year through June 2020 next Tuesday (June 11).

The move comes amid an austerity drive launched by the government to solve the cash-strapped nation’s economic woes, with the country bracing for a raft of belt-tightening measures to address an out-of-control deficit.

Economists warn the government may have to come up with a combined 700 billion rupees ($5 billion) worth of expenditure cuts and new taxes to satisfy the International Monetary Fund (IMF), which is negotiating to loan the country $6 billion over the next three years, said a Reuters report. Pakistan is expected to put in place measures to rein in a ballooning fiscal and current account deficits to get access to the funds.

Without mentioning how much budget cut would be undertaken, Major General Asif Ghafoor, Director General (DG) Inter Services Public Relations (ISPR) – the media wing of the military – in his Twitter message yesterday (Tuesday, June 4) said that voluntary cuts in the defence budget for next fiscal year would not be at the cost of defence and security.

“Voluntary cut in defence budget for a year will not be at the cost of defence & security. We shall maintain effective response potential to all threats. Three services will manage impact of the cut through appropriate internal measures. It was important to participate in development of tribal areas & Balochistan,” Ghafoor said.

Pakistan PM Imran Khan said he was very appreciative of the Pakistan military’s “unprecedented voluntary initiative of stringent cuts in their defence expenditures” in light of the country’s financial situation.

Khan said he was grateful for the move that came “despite multiple security challenges” that Pakistan faces. He said that the funds saved will be used for the development of the newly-merged tribal areas as well as in Balochistan.

Imran Khan, after assuming office last year, launched several austerity measures. He moved into a modest three-bed room house of his military secretary along with two servants. Last month, the government announced that all civil and military institutions would contribute to the austerity-oriented federal budget for 2019-20.

“There will be austerity in the coming budget. We will try to keep government expenditures to the minimum possible level,” Prime Minister’s Adviser on Finance and Economic Affairs Hafeez Shaikh had said.

In 2018, Pakistan was the 20th biggest military spender in the world with an expenditure of USD 11.4 billion, a report published by the Stockholm International Peace Research Institute (Sipri) said in April.

The military spending of 2018 made up for four per cent of Pakistan’s gross domestic product (GDP) which is the highest level since 2004, according to the report by the Sweden-based institute.

The top military spender in the world is the United States, which spent USD 649 billion on its forces last year. The US military spending, however, has decreased by 17 per cent over the past decade, the report said.

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Pakistan faces domestic backlash after India secures lower tariffs in US trade deal

India’s US trade agreement has sparked criticism in Pakistan after Islamabad ended up with higher tariffs despite sustained outreach to Washington.

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PM Shehbaz Sharif

India’s recently concluded trade agreement with the United States has triggered strong domestic criticism in Pakistan, where opposition leaders, journalists and commentators are questioning Islamabad’s diplomatic strategy after the country ended up with higher tariffs than India.

Under the agreement announced on February 2, US tariffs on Indian exports have been set at 18 per cent, while Pakistani goods will face a 19 per cent rate. The outcome has drawn sharp reactions in Pakistan, especially given what critics describe as sustained efforts by its leadership to engage Washington in recent months.

New Delhi, by contrast, is widely seen as having resisted pressure from US President Donald Trump and negotiated from a position of economic leverage rather than personal diplomacy.

Social media reactions highlight public anger

Following the announcement, Trump shared images related to India, including India Gate and a magazine cover featuring Prime Minister Narendra Modi alongside himself, before confirming the revised tariff rate for Indian goods. The optics did not go unnoticed in Pakistan, where social media users questioned why India secured better terms without overt displays of political deference.

One widely circulated post by Pakistan-based X user Umar Ali used sharp language and imagery to criticise Pakistan’s approach, reflecting growing frustration among sections of the public over what they see as an unequal outcome despite extensive outreach efforts.

Opposition leaders question foreign policy approach

Former Pakistan Tehreek-e-Insaf minister Hammad Azhar described the outcome as a failure of strategy rather than circumstance. He argued that modern foreign policy depends on economic strength, market access and tariffs, not symbolic gestures or personal relationships, pointing to India’s recent trade agreements with both the US and the European Union as examples.

Other opposition figures echoed similar views, saying India negotiated with “strategic autonomy” while Pakistan relied too heavily on personal engagement with US leadership.

Journalists warn of economic consequences

Journalists in Pakistan also weighed in, warning that the tariff decision could deepen the country’s existing economic challenges. Concerns were raised about declining exports, falling foreign investment and reduced bargaining power on the global stage.

Commentator Imran Riaz Khan criticised what he termed a failed lobbying strategy, arguing that symbolic gestures cannot replace economic leverage in international negotiations. Digital creator Wajahat Khan similarly framed the outcome as a reflection of unequal negotiating positions, stating that India approached the talks as a partner, while Pakistan did not.

India’s trade deals expected to boost exports

India’s back-to-back trade agreements with the European Union and the United States are expected to provide a significant boost to exports. Estimates suggest these deals could add up to $150 billion in exports over the next decade, strengthening India’s economic standing and reinforcing its negotiating position in future global trade talks.

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New Delhi free to buy oil from any source, Russia says amid US deal claims

Russia has said India is free to purchase oil from any country, dismissing claims that New Delhi has agreed to stop buying Russian crude under a US trade deal.

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New Delhi free to buy oil from any source, Russia says amid US deal claims

Russia has said that India is free to purchase crude oil from any country, responding to claims by US President Donald Trump that New Delhi has agreed to stop buying Russian oil as part of a recent trade deal with Washington.

The Kremlin said Russia is not India’s only energy supplier and noted that India has long sourced crude oil from multiple countries. It added that there is nothing new in India’s efforts to diversify its oil imports.

Kremlin spokesperson Dmitry Peskov said that energy experts are well aware that India purchases oil and petroleum products from various global suppliers. He added that Moscow does not see any change in India’s approach to sourcing crude.

No official word from India on halting imports

A day earlier, Peskov said Russia has not received any official statement from India regarding the cessation of Russian oil purchases. Russia’s Foreign Ministry echoed the view, saying the hydrocarbon trade between the two countries remains mutually beneficial.

Foreign Ministry spokesperson Maria Zakharova said India’s purchase of Russian hydrocarbons contributes to stability in the global energy market and that Moscow remains ready to continue close cooperation with New Delhi in the energy sector.

Russian media also noted that, unlike the US president, Prime Minister Narendra Modi has not made any public statement indicating an agreement to stop Russian oil imports.

India’s oil imports from Russia

India has continued to import Russian crude even after the US imposed tariffs on Indian goods. According to global trade data provider Kpler, India has been importing around 1.5 million barrels of Russian crude per day, making it the second-largest buyer of Russian oil and accounting for more than one-third of India’s total crude imports.

India buys about 88 per cent of its crude oil needs from overseas, with roughly one-third sourced from Russia. At its peak, imports from Russia crossed 2 million barrels per day, before falling to around 1.3 million barrels per day in December. The volume is expected to remain broadly stable in the near term.

However, imports declined further to about 1.1 million barrels per day in the first three weeks of January following higher tariffs imposed by the US, including levies linked to purchases of Russian energy.

Complete switch unlikely, experts say

Energy experts believe Indian refiners cannot fully replace Russian crude with American oil. Igor Yushkov of the National Energy Security Fund said US shale oil is lighter in grade, while Russian Urals crude is heavier and contains more sulphur.

He explained that replacing Russian oil would require blending different grades, increasing costs for refiners. He added that the US is unlikely to be able to supply the volume currently exported by Russia to India.

Yushkov also recalled that when Russia redirected its oil exports from Western markets to India in 2022, it reduced production by about one million barrels per day, contributing to a sharp rise in global oil prices and record fuel prices in the US.

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Moscow says no word from India on stopping Russian oil purchases

Russia says it has received no confirmation from India on stopping Russian oil purchases, despite Donald Trump’s claim that the move was part of a new India-US trade deal.

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Vladimir Putin

The Kremlin on Tuesday said it has not received any official communication from India regarding a halt in Russian oil purchases, following claims by US President Donald Trump that New Delhi had agreed to stop buying Russian crude as part of a trade agreement with Washington.

Kremlin spokesperson Dmitry Peskov told reporters that Moscow had not heard any confirmation from Indian authorities on the matter.

“So far, we haven’t heard any statements from New Delhi on this matter,” Peskov said, responding to Trump’s remarks linking reduced US tariffs on Indian goods to an alleged commitment by India to end Russian oil imports.

Russia stresses importance of ties with India

Peskov said Russia respects bilateral relations between India and the United States but underlined the strategic importance of ties between Moscow and New Delhi.

“We respect bilateral US-Indian relations,” he said, adding that Russia places equal importance on its strategic partnership with India.
“This is the most important thing for us, and we intend to further develop our bilateral relations with Delhi.”

What Trump claimed

Trump announced the India-US trade deal on Monday, stating that tariffs on Indian goods had been reduced from 50 per cent to 18 per cent. He claimed the reduction was linked to India agreeing to stop purchasing Russian oil.

According to Trump, India would instead buy more oil from the United States and potentially from Venezuela. He also suggested that the move would help bring an end to the war in Ukraine.

“He agreed to stop buying Russian oil and to buy much more from the United States and, potentially, Venezuela,” Trump said, referring to Prime Minister Narendra Modi.

India’s reliance on Russian crude

India has emerged as one of the largest buyers of Russian crude since the start of the Ukraine conflict. It currently imports around 1.5 million barrels of Russian oil per day, accounting for more than one-third of its total oil imports, according to global trade data.

India is the second-largest purchaser of Russian crude globally. Even after earlier US tariff measures on Indian goods, New Delhi continued its Russian oil imports, citing energy security concerns.

The Indian government has consistently maintained that securing affordable energy supplies is critical, given the country’s heavy dependence on oil imports.

Shift in energy ties after Ukraine war

Historically, India’s relationship with Russia was centred more on defence cooperation than energy trade, with Russia supplying a majority of India’s military equipment while contributing only a small share of its oil imports.

After the invasion of Ukraine, India significantly increased purchases of discounted Russian oil. The move helped India boost energy supplies while providing Russia with much-needed revenue amid Western sanctions.

As recently as December 2025, Russian President Vladimir Putin said during a visit to New Delhi that Moscow was ready to ensure uninterrupted fuel supplies to India despite pressure from the United States.

Earlier US push for Indian energy imports

Trump had earlier said, following a meeting with Prime Minister Modi in February last year, that India would begin buying more American oil and natural gas. However, those discussions did not lead to a major shift in India’s energy sourcing.

Subsequent US tariff measures also failed to significantly alter India’s stance on Russian oil imports.

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