India and Pakistan’s Economies in 2026: A Complete Data Analysis and Forecast

India and Pakistan are two neighboring South Asian economies that came into existence in 1947. In spite of sharing a common colonial history, cultural resemblances, and geographic closeness, their economic routes over the past seven decades have separated significantly.

Todays, India stands as one of the world’s fastest-growing major economy, developing, lower-middle income economy, newly industrialized country, whereas Pakistan is also developing country, lower-middle income economy, continues to fight with structural weaknesses, macroeconomic instability, and recurring balance-of-payments crises. This article highpoints a thorough comparison of India and Pakistan’s economies across key economic indicators, sectors, and policy approaches.

Before going to discuss the economic indicators of both the countries, I would like to inform my readers, that fiscal year of Pakistan starts on 1^st of July and ends on 30^th June of next year, on the other hand India’s fiscal year duration is from April 1^st to 31th march of next year.

Here it is important to mention that mostly data that would be depicted in this article is for the current (ongoing) fiscal years, and for 2026. In case of Pakistan 2024-25(1^st of July 2024 to 30th of June 2025) and in case of India also 2024-25 (1^st of April 2024 to 31st march 2025).

1. Nominal GDP vs GDP (PPP): A Comparative Overview

Talking about India and Pakistan’s economies, India’s nominal GDP would be 4.5 trillion dollars, while Pakistan’s 417 billion dollars, expectedly, in 2026. According to International Monetary Fund (IMF) and few other reports, India’s GDP in PPP (purchasing power parity) terms forecast is 19.14 trillion dollars. India is 4^th largest economy in nominal GDP, and 3^rd largest economy in PPP terms.
On the other hand, according to World Economics estimates GDP (PPP) of Pakistan would be 2.14 trillion dollars in 2026. GDP Growth Rate of India would be (forecast) 7.3%, while Pakistan’s 3.6% (forecast), at the end of current fiscal years.Pakistan is 41^th largest economy in nominal GDP, and 26th largest economy in PPP ( purchasing power parity).

2. Per Capita GDP Overview

Second most important figure, if we talk about India and Pakistan’s economies, according to the International Monetary Fund (IMF) and World Economic Outlook, nominal GDP per capita of India is 2,818 dollars, and of Pakistan’s is 1707 dollars. Current population of India is 1.48 billion people, while Pakistan’s is more than 25 Crore. Population wise India has surpassed China, and one of the biggest countries having huge population.

3. Debt Structure: Foreign & Domestic

Currently, India’s external debt (foreign debt), Includes government + corporates + banks + other institutions, is 746 billion dollars, around. With an exchange rate of ₹82 = $1 USD, in Indian rupee it is ₹61.23 lakh crore. It is, approximately 16.6 % of GDP. On the other hand, Pakistan’s external debt is estimated at around 130 billion dollars.

Internal debt (domestic loan) of India is projected at ₹190 lakh crore (about 2.32 trillion dollars), if exchange rate is considered ₹82 = $1 USD, nearly 51 % of GDP. While if we debate about Pakistan, during discussion of India and Pakistan’s economies, then Pakistan’s internal (domestic loan) is roughly 60,861 billion rupees (60.86 trillion rupees) or in dollar footings 215 billion dollars (considering ₹82 = $1 USD), roughly.

Total public debt (foreign + domestic) of India is 3.07 trillion dollars, around 68 % of GDP. On contrary to this, Pakistan’s total government debt in dollar term is 345 billion dollars (130+215=345 billion dollars).

Note: – Above cited % of GDP related to Indian economy, are, if nominal GDP (national income) is 4.5 trillion dollars in 2026).

4. Exports, Imports, and Trade Dynamics

If I through light on India and Pakistan’s economies, exportation of India is 820.9 billion dollars, mutually goods and services, while importation is 915.2 billion dollars. India has trade deficit of, 94.3 billion dollars, around. Key exports allies are United States, European Union, United Aran Emirates, China, Hong Kong, Singapore, United Kingdom, etc.
And key import allies are China, Hong Kong, Russia, European Union, UAE, United States, Saudi Arabia, etc.

Pakistan’s exportation is 32 billion dollars, and Importation is 58 billion dollars, so Pakistan has trade deficit of 26 billion dollars. This trade deficit is enormous. Pakistan’s key export allies are China, UAE, United Kingdom, Germany, Spain, Netherlands, United States, Italy, etc. And key importing states are China, UAE, Saudi Arabia, Singapore, Indonesia, Kuwait, Russia, U.S.A, etc.

5. Education and Literacy Indicators

While we are debating about India and Pakistan’s economies, it is important to take birds eye view of literacy situation of India. With reference to World Bank, literacy rate in India is 77–78% (15+ above). This depicts that around 3 out of 4 persons having age 15 and above can read and write in a sensible way.

Literacy rate in Pakistan is 63 %, it means if an individual can read and write, around six out of ten persons aged 10 or above, then those people will be considered as literate.

6. Status of Employment

During comparison of India and Pakistan’s economies, it is imperative to bring under discussion the sector of job market. India’s national unemployment rate, as of December 2025 is around 4.8 %. This number shows the percentage of individuals aged 15 years and older than 15 years, who are dynamically in search of work but have no job.Entire labor force in India is610 million persons (61crore).This represents persons aged 15–64 who are either have job or vigorously looking for work.

With reference to India and Pakistan’s economies, if I discuss about job market in Pakistan, then this figure is 7.1 %. Over-all labor force in Pakistan is 77 million persons (7 crore and 70 lakh).

7. Global Economic Standing

Their associations with global financial organizations are an unambiguous contrast. Pakistan’s economic management has been mostly shaped by repetitive IMF bailouts—Pakistan contacted to International Monetary Fund 24 times since 1958, most freshly for a $7 billion program in 2024. While, India had not got any loan from IMF since its momentous reforms in 1991.

India is member of these worldwide organizations, IMF, WTO, WCO, SAFTA, BIMSTEC, BRICS, G-20, BIS, AIIB, ADB and others. Pakistan is also member of many international organizations like IMF, WORLD BANK, WTO, ADB, etc.

8. Poverty Situation Overview

While talking about comparison of India and Pakistan’s economies, the topic of poverty is highly concerned to economies. According to World Bank and official assessments, around 13–14% of India’s individuals live under the state poverty line in 2025–26. In absolute footings, this is around 180–190 million people remaining in poverty.

According to international poverty criteria of $4.20/day (PPP), 23.9 % of India’s people lives below poverty line.
This makes 342 million people (34 crore and 20 lakh), 2022–23 data.

In Pakistan, according to state poverty line, 25 % individuals fall under to poverty line. Around 65 million (6 crore and 50 lakh) Pakistanis are assessed to be poor under the national poverty criteria.

While, with reference to International Poverty criteria recommended by World Bank, for lower‑middle‑income economies, this International Poverty Line is $4.20/day per individual. Reference to this measure 44.7 % persons are poor and 10.8 million persons are living under poverty line. (10 Crore and 80 lakh people).

9. International Reserves

While comparingIndia and Pakistan’s economies in 2026, another vital data that is foreign exchange reserves, have a key placement in both the economies. India’s forex reserves reached to a best ever height of 723.8 billion dollars almost, as of January 30, 2026, of the Reserve Bank of India. These reserves are sufficient for over 11 months of importation.

Whereas, as of January 2026, entire liquid foreign exchange reserves of Pakistan were 21.2 billion dollars.

10. Foreign Direct Investment Trends

Foreign direct investment of around 81.04 billion dollars flows to India in fiscal year 2025-26, this data source is India’s Ministry of Commerce and Industry. The services sector was the principal receiver of this foreign direct investment. These gross FDI inflows are for the fiscal year 2024-25. (April 2024 to March 2025).

If I through light on total FDI Inflows during fiscal year 2024–25, with reference to India and Pakistan’s economies comparison, then Pakistan received about 2.46 billion dollars in FDI from all overseas partners jointly.

11. Inflation Rate Analysis

During the discussion of India and Pakistan’s economies data, one element is very prominent to be highlighted and that is inflation. Average CPI inflation for fiscal year2024-25 was around 4.6 %.

Whereas, Pakistan’s average inflation for the fiscal year 2024-25 was about 4.5 %, a significant reduction from around 23.4 % in fiscal year 2023-24.

12. Government Budget and Fiscal Health

Total income revenues (tax + non-tax) were about ₹30.36 lakh crore, and whole spendings were around ₹46.56 lakh crore, according to The Economic Times. Budget shortfall was round ₹15.77 lakh crore in absolute terms. Fiscal shortfall for fiscal year 2024-25, stood at almost (4.8 % of GDP).

Total revenue for the fiscal year 2024-25 was, nearby 17.997 trillion PKR (15.7 % of GDP). Total spending was about 24.165 trillion PKR (21.1 % of GDP). The consequential budget shortfall (discrepancy) was 6.168 trillion PKR (5.38 % of GDP).

13. Remittances Status

India and Pakistan’s economies comparison is imperative for getting the information about foreign remittances of both the states. India received a highest 135.46 billion dollars remittances in fiscal year 2025, the determined arrival of money sent back to India by Indian overseas.

Pakistan also received a greatest remittance of 38.3 billion dollars during the fiscal year 2024-25, more than 27 % from the former year.

Conclusion

In conclusion, India and Pakistan’s economies in 2026 replicate conflicting growth paths and structural challenges. India shows strong GDP growth, determined by services and industrial development, while Pakistan is facing sluggish recovery among fiscal and foreign pressures. Inflation, employment, poverty, trade and budget related figures highpoint the different economic truths of both economies. By investigating the newest facts and figures, it is obvious that policymakers in India and Pakistan must focus on economic growth, poverty reduction, reducing budget deficits, job sector and on investment to make strong their own economies.