By Dzmitry @Adobe Stock
Clément Therme of War on The Rocks reports that Iran plans to increase its military budget by 200 percent. Therme writes:
Iran announced its proposed military budget for the year 1404 (March 2025–March 2026). In response to both internal priorities and external pressures, Iran plans to increase its military budget by 200 percent.
Iran’s decision to allocate a large portion of its revenue directly to the military sends several messages. For regional neighbors, particularly Israel, Iran’s budget signals its intent to maintain a strong defensive and offensive posture. By emphasizing its investment in missiles and drones, Iran conveys that it is prepared to respond to any regional military provocations or preemptive strikes. Iran’s increase in military spending is a declaration of its ability to prioritize defense even amidst economic hardships, reflecting resilience from Western influence. This also signals to Western countries that sanctions are not deterring its military ambitions but rather reinforcing its resolve to enhance self-reliance. Increased military spending signals to both allies and adversaries that Iran is committed to preserving and potentially expanding its influence in Iraq, Syria, Lebanon, and Yemen. […]
The first motivation behind the 200 percent increase of next year’s military budget is Iran’s goal to consolidate its influence in the Middle East, countering perceived military threats from rivals like Israel, and the U.S. military presence in the region, especially in the context of Donald Trump’s victory in the U.S. presidential election on Nov. 5, 2024. […]
Increased funding to the Islamic Revolutionary Guards Corps and Basij implies prioritizing internal security alongside regional defense. With this budget increase, Iran is expected to focus on several strategic areas, notably an improvement of its missile technology after the limited deterrence effect of the strikes against Israel in April and October 2024. Iran has long invested in its missile capabilities, and recent budgets may further support advancements in ballistic and cruise missile technology, focusing on increased range, precision, and payload capacity. This includes potential upgrades to medium- and long-range missiles to counteract regional adversaries in general and Israel in particular. Also, Iran has developed a sophisticated drone program, and increased funding may lead to expanded production and refinement of its uncrewed aerial vehicles, enhancing intelligence, surveillance, and offensive capabilities. This also includes further development of stealth drones and loitering munitions (kamikaze drones).
To counter threats from regional adversaries with advanced air capabilities, Iran will also focus on improving its air defense systems. Iran is likely to continue to develop indigenous systems (such as Bavar-373). Even though official Iranian sources claim that Iran’s Bavar-373 missile defense systems were more effective than Russian systems during the Israeli strikes on Oct. 26, 2024, these strikes destroyed most of the S-300 systems deployed on Iranian territory, making Iran even more dependent on Russia for missile defense. […]
Iran’s growing sense of insecurity is likely to push its decision-makers toward increased investment in military infrastructure, especially if they conclude that the new Trump administration’s policies will prioritize Israeli interests. This strengthened U.S.-Israeli alignment may therefore drive Tehran toward greater military spending and closer military cooperation with Russia. The only way to avoid this scenario would be if a shared need for regional stability prevails, preventing further escalation between Iran and its networks on one side, and the Washington–Tel Aviv alliance on the other.
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