Finepoint | India Must Strike Pakistan Where It Hurts: Its Military-Industrial Complex
Even with soaring inflation, a tanked rupee, and near-empty forex reserves, Pakistan’s terror ecosystem is still flush with cash
A leopard never changes its spots. Nowhere is this truer than in Pakistan – a state perpetually on financial life support, and yet always capable of funding terror against India. This paradox should no longer surprise us. What should alarm us instead is the source of that funding: Pakistan’s military-industrial complex, the real jugular India must now target.
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The terror attack in Pahalgam, Kashmir on April 22 shook the nation. The Resistance Front, a proxy for Pakistan-based Lashkar-e-Taiba, initially claimed responsibility – only to later withdraw, blaming a so-called cyber breach. Just days before the assault, Pakistan Army Chief Asim Munir – an ex-ISI man – had declared that Kashmir remains their “jugular vein", and went on to say that Hindus were inherently different from them. This was a deliberate attempt to revive the Kashmir conflict and reignite the larger India-Pakistan faultline.
The Pakistani military, hand-in-glove with the ISI, has long harboured terror outfits as strategic tools. This time, drawing from the Hamas playbook, terrorists targeted innocent civilians – identified by religion. It was clearly designed to provoke a fierce Indian response.
For General Munir, this serves multiple purposes: It disrupts Jammu and Kashmir’s political and economic progress, seeks to ignite religious tensions within India, and edges Pakistan toward a war footing – allowing him to consolidate power and rally a deeply divided nation. And Munir desperately needs that. His authority is crumbling.
Baloch rebels are giving the Pakistan army a bloody nose, the Tehreek-e-Taliban is crushing them in Khyber Pakhtunkhwa and Sindh is going through political unrest of its own, apart from the larger public anger over Imran Khan’s imprisonment. Pakistan is at its breaking point.
India has rightly responded by beginning to inflict economic costs – most notably with the historic move to suspend the Indus Water Treaty. More than 80% of Pakistan’s agriculture and a third of its hydropower depend on the Indus basin. Revoking the treaty’s benefits will have severe, long-term consequences for Pakistan. But this should only be the beginning.
Even with soaring inflation, a tanked rupee, and near-empty forex reserves, Pakistan’s terror ecosystem is still flush with cash because it isn’t just state-sponsored – it is bankrolled by Pakistan’s vast, opaque military-industrial empire. The real source of terror funding is this unaccountable military complex that looms over Pakistan’s economy like a parasite.
Since its creation, Pakistan has been ruled directly or indirectly by its military. No Prime Minister has ever completed a full term. Those who defied the military were either hanged, assassinated, jailed – or exiled.
Pakistan’s military is not just an armed force – it is the country’s most powerful business conglomerate, a deeply corrupt one at that. There is no major business in Pakistan which does not entail the involvement of the Pakistani army. From cement, fertiliser, food, insurance and pharmaceuticals to banking and real estate, its tentacles extend into every corner of the economy. It also has a dark footprint in the narcotics trade. Its holdings – via the Fauji Foundation, Army Welfare Trust, Shaheen Foundation, and other “welfare" fronts – generate over $26 billion annually. That’s more than the revenue of India’s biggest business houses, and worth nearly 10% of Pakistan’s GDP.
Shockingly, this empire operates in a legal twilight. The Pakistan Army (Amendment) Bill 2023 not only legalised these holdings but criminalised criticism or disclosure of their dealings. The military’s grip on the economy is legally unassailable within Pakistan. Any scrutiny – internal or external – is off-limits.
Decades of global aid, especially from the US, has propped up the Pakistani military to this level of dominance. The US has obligated over $67 billion to Pakistan since 1947. Between 2002 and 2011, the number stood at $18 billion, averaging at around $2 billion every year. While that aid was significantly cut by Trump’s first administration, the support continues, with Trump clearing a $400 million package to support Pakistan’s F16s this year. The most striking detail however is the lack of clarity on these numbers, with staggeringly conflicting claims by Pakistan and the US. This shows that the scale of aid was much higher, and in the case of Pakistan, underreported and misallocated. What does that mean? That means these billions were directly pocketed by the Pakistani military-industrial complex. And this is common knowledge.
Pakistan is said to have diverted a large chunk of this amount to strengthen the military’s stranglehold on the nation, while also propping up home-grown terror groups as a part of its strategy to defeat India with a thousand cuts and to extend its interests in Afghanistan. This two-front conflict has enriched the Army and kept Pakistan on its toes for decades.
It is the same with IMF loans, Pakistan is receiving its 24th bailout, about $7 billion. Where will this money go? It would be comical to think it will go to the Pakistani people. It is sufficiently clear that the Pakistani military has a corpus of funds dedicated to its terror activities, including those in Kashmir, stashed away from the lens of IMF conditions. The economic situation of Pakistan will not improve as long as this all-powerful conglomerate is not dismantled. The global lending agencies, including the IMF, must acknowledge this and demand access to scrutinise the finances of this mega-rich army of a mega-poor nation.
This is why conventional methods to inflict costs on Pakistan’s economy are not enough. India must launch a renewed onslaught to isolate Pakistan’s military, especially its leadership, inflicting costs on the very people that thrive on war and terror. With the world condemning the recent terror attack, India must pursue global sanctions against the Pakistani military, its companies and individuals, their assets abroad and everything in between. India must also establish that any talk about counter-terrorism is hollow without concrete action against Pakistan and its military.
When it comes to India’s military response – it should come at a time and place of its own choosing. It must play the long game, consistently keeping Pakistan’s military on edge around the clock, wear them down mentally and operationally, and strike when they’re stretched thin and fatigued. This approach should complement India’s offensive defence strategy in the long term. New Delhi should expose and humiliate the Pakistani military establishment, especially its generals, on every possible front.
The bigger goal is not just deterrence – it is degradation. Degrade Pakistan’s military standing. Degrade its confidence. Degrade its image.
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