The nature of the political economy of South Asia has always been characterized by defense spending. As nuclear powers, India and Pakistan always spend large amounts of their national budgets on military spending. Such prioritization represents long-term strategic competition and, at the same time, poses urgent questions regarding trade-offs in public policy.

The ancient guns and butter argument between governments focusing on military security (guns) and social welfare (butter) is especially relevant in South Asia, where poverty levels, illiteracy, and underdevelopment continue to be pervasive. It is not only a fiscal dilemma but also a political one. Both India and Pakistan leaders defend their defense expenditures as existential needs based on the perception of historical confrontation, border issues, and terrorism.

However, the opportunity costs are very clear: the millions are left without healthcare, education, and infrastructure. This article examines the politics of defense expenditure in South Asia and how it fits in the general theme of strategic competition, economic constraints, and governance values.

The Indian and Pakistani strategic competition, coupled with the increasing influence of China, contributes to the rising defense spending levels in the region. India has the 5th-largest military expenditure in the world, with a defense budget of INR 6.21 trillion (about 74.30 billion US dollars) in 2024-2025. A fragile economy like Pakistan still allocated Rs 2,122 billion from its FY2024-25 budget, which represents more than 11% of its total.

The next major contributing factor to the arms race in the region is that China continues to modernize its military, with its spending reaching more than 314 billion in 2024. The relationship between India and the United States, Japan, and Australia through the Quadrilateral Security Dialogue (QUAD) demonstrates how India is trying to counter the emergence of China. Pakistan, in its turn, wants to be closer to China, and by doing so, a triangular nature of relationships is formed, which only perpetuates militarization.

The conflict in Kashmir is a hot spot. In 2019, the situation has deteriorated since the abrogation of Article 370, and both India and Pakistan have stepped up........

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