KEY POINTS
- Indigenous defence technology deployment signals maturity in military-industrial complex development.
- Homegrown drones and electronic warfare boosted Pakistan’s defence export potential globally.
- Pakistan ranks 10th largest arms exporter in Global South markets.
- Pakistan Stock Exchange gained 3.9pc defence stocks surged post-conflict rally.
- Sovereign risk rating improved on regional stabilisation and political alignment.
- Diplomatic support from Beijing, Ankara, Riyadh strengthens Pakistan’s economic leverage.
- Gallup survey shows 71pc believe the country moving in the right direction.
ISLAMABAD: In the aftermath of Pakistan’s decisive military victory in the May 7–10 border clash with India, the nation is experiencing a swift surge in economic optimism, both domestically and internationally.
Defence analysts, financial experts, and global risk firms suggest that Pakistan’s strategic performance has not only enhanced its regional stature but could also open new doors for trade, defence exports, and investor confidence.
“The successful deployment of Pakistan’s indigenous defence technology signals a maturity in its military-industrial complex,” said Richard Weitz, a senior fellow at the Hudson Institute.
“Countries looking for cost-effective, proven defence systems are now turning their attention to Pakistan.”
Defence export potential grows
With the effective use of homegrown drones such as Shahpar-II and electronic warfare units during the brief but intense conflict, Pakistan is being viewed as a potential supplier in the growing market for affordable Unmanned Aerial Vehicles (UAVs) and smart munitions.
There’s now a perception that the country can act decisively without plunging into chaos. That’s a big deal for capital flows– Julian Barnes, South Asia analyst at Bloomberg Economics
According to the Stockholm International Peace Research Institute (SIPRI), Pakistan is already the 10th largest arms exporter in the Global South, and this recent battlefield performance could accelerate defence-related export deals.
Officials from Pakistan’s Ministry of Defence Production confirmed talks are underway with buyers from the Middle East, North Africa, and Southeast Asia.
Capital flows regain momentum
The Pakistan Stock Exchange posted a 3.9 per cent weekly gain following the conflict, led by a 17 per cent rise in shares of defence-linked manufacturers such as Heavy Industries Taxila (HIT) and Global Industrial & Defence Solutions (GIDS).
The Pakistani rupee also gained 1.2 per cent against the dollar as foreign investors returned cautiously to the equity market.
This moment has given Pakistan leverage—diplomatically and economically. If Islamabad plays it right, this victory could be used to negotiate favourable trade routes, defence partnerships, and even secure terms with financial institutions like the IMF – Dr. Ayesha Siddiqua
Bloomberg South Asia reported on Tuesday morning that Pakistan’s sovereign risk rating has seen a modest improvement on the back of “short-term regional stabilisation and decisive political alignment post-clash.”
“Markets aren’t cheering conflict—they’re cheering Pakistan’s show of resolve, coherence, and restraint,” said Julian Barnes, South Asia analyst at Bloomberg Economics.
“There’s now a perception that the country can act decisively without plunging into chaos. That’s a big deal for capital flows.”
Defence stocks surge ahead
Since the ceasefire, diplomatic outreach has intensified. Beijing, Ankara, and Riyadh have reportedly expressed support for Pakistan’s position and signalled willingness to advance existing energy, transport, and defence logistics projects.
This is the kind of psychological high that can energise reforms, mobilise the private sector, and encourage the diaspora to reinvest – Amna Najeeb, senior investment advisor at PakInvest Capital
“This moment has given Pakistan leverage—diplomatically and economically,” said Dr. Ayesha Siddiqua, a London-based strategic affairs expert.
“If Islamabad plays it right, this victory could be used to negotiate favourable trade routes, defence partnerships, and even secure terms with financial institutions like the IMF.”
Confidence reaches six-year peak
A snap survey released on Tuesday by Gallup Pakistan indicates that 71 per cent of respondents believe the country is “moving in the right direction” — the highest since 2018. Approval ratings for national leadership and the military are also surging.
“This is the kind of psychological high that can energise reforms, mobilise the private sector, and encourage the diaspora to reinvest,” said Amna Najeeb, senior investment advisor at PakInvest Capital. “Victory created a sense of strategic control—something investors crave.”
Turning gains into growth
While the full economic impact of the recent onflict will unfold over time, early indicators suggest that Pakistan’s battlefield success has catalysed a wave of economic confidence and strategic opportunity.
The challenge now is to translate military momentum into long-term economic transformation and inclusive growth.
