Iran Increases Military Budget by 200 Percent in Preparation for Potential Protracted War with US
Iranian military leaders and lawmakers have doubled down on long-term defense readiness following the country's twelve-day conflict with Israel and the United States in June 2025. Brigadier General Mohammad Reza Ashtiani, Deputy Chief of the General Staff of the Armed Forces and former Defense Minister, stated that Iran has sufficient military stockpiles to sustain a decade of warfare, if necessary. His statement coincided with the Iranian Parliament's approval of the general outline of a draft law to strengthen the country's defense capacity, which mandates full funding of the 2025–2026 military budget, payment of outstanding allocations from the previous year, and the opening of foreign-held financial assets for emergency use under the Armed Forces General Staff.
Ashtiani stated that Iran's equipment suffered no significant damage during the last war and asserted that the country has sufficient military reserves to continue fighting for ten years, if necessary. He emphasized that morale, rather than just material, plays a dominant role in warfare, referring to the concept that "morale constitutes three-quarters of combat power." He further stated that Iran's armed forces are equipped not only with advanced weaponry but also possess extensive operational experience and training. Comparing Iran's situation to its enemies, Ashtiani claimed that enemy forces may possess modern weapons but lack morale and psychological resilience. These comments came in the context of a resurgent national debate over military preparedness, following significant regional escalations and internal discussions regarding the direction of the country's defense budget.
In parallel, the Iranian Parliament's National Security and Foreign Policy Committee approved the general framework of a bill sponsored by Tehran MP Ali Khezrian and signed by 120 MPs. The proposal is designed to ensure uninterrupted military funding, especially after recent hostilities. The bill consists of a single article with three binding clauses. The first clause requires the Planning and Budget Organization and the Ministry of Oil to pay the full 2025 defense budget and also to settle all outstanding allocations starting in 2024. The second clause directs the Planning Organization to disburse 100 percent of the annual defense expenditure approved by the National Security Council. The third clause requires the Central Bank to allocate blocked foreign assets and other resources to meet emergency defense needs. The bill, which was approved in a plenary session attended by senior officials from the Ministry of Defense, the General Staff, the Islamic Revolutionary Guard Corps, and Artesh, is now being reviewed by the committee's defense subcommittee for final amendments and preparation for a full vote.
This legislative initiative follows a 200 percent increase in the defense budget previously passed in October 2024, which increased military spending from approximately 7.220 trillion rials (approximately $15.7 billion) to approximately $46 billion for the 2025 fiscal year. Reports from Iran International and IFP News indicate that the bill also mandates the Ministry of Oil and the Budget Office to finance the entire defense budget without delay or compromise, as well as to resolve all previous years' financial shortfalls for specific defense programs. The Central Bank, under this new provision, will be required to disburse previously blocked funds abroad for emergency military procurement and project implementation. This obligation formalizes a mechanism previously handled through ad hoc decisions and discretionary orders. The proposed law also includes a requirement that annual military budget allocations determined by the Supreme National Security Council be fully respected, further strengthening the centralization of defense budget authority under the military leadership and a high-ranking political body. The law is widely interpreted as a formal response to Israeli attacks on Iran's military infrastructure and leadership during the June 2025 war.
The recent conflict, often referred to in Iranian media as the "twelve-day war," began on June 13 and included direct Israeli and American attacks on Iran's nuclear facilities and underground command posts, including a reported bombing on June 16 that resulted in the injury of President Masoud Pezeshkian. According to the Fars News Agency, six precision-guided munitions hit access points and ventilation systems at a protected site in Tehran, causing a power outage and forcing an evacuation through an emergency tunnel, reportedly resulting in a leg injury to the president. Iran's response included launching hundreds of drones and missiles at Israeli targets and attacking the US Al-Udeid Air Base. These events triggered Operation True Promise III, a military campaign characterized by the use of conventional and unmanned systems, aimed at demonstrating Iran's retaliatory capabilities. A ceasefire was reportedly reached on June 24, after Israel withdrew from certain operational zones. In this context, General Ashtiani's statement about a ten-year war and the parliamentary defense bill appear to function together as a signal of deterrence and institutional preparation for a long-term military engagement.
Iran's armed forces consist of several main branches: the Regular Army (Artesh), the Islamic Revolutionary Guard Corps (IRGC), the Law Enforcement Command (FARAJA), and the General Staff of the Armed Forces. In the 2025-2026 budget, a disproportionate share of resources has reportedly been allocated to the IRGC compared to the regular military, reinforcing a broader trend identified by analysts over the past few years. According to Iranian sources, the total proposed defense budget for 2025 is approximately 865,000 billion tomans, an increase of nearly 76 percent over the 2024 allocation of approximately 496,000 billion tomans. A significant portion of the new budget is allocated to the military and intelligence personnel pension system, reflecting demographic and institutional needs. The financial and administrative instruments provided by the new draft law will allow for the uninterrupted continuation of defense development programs, including those involving the production of missiles, drone systems, and cyberwarfare capabilities. The proposed funding will also support efforts to restore and modernize equipment damaged in the June conflict, although the government claims that overall material losses are limited. These defense reforms are taking place amid broader geopolitical and economic conditions, including ongoing sanctions, limited access to foreign markets, and high inflation. International media outlets such as Bloomberg and the Financial Times have noted that Iran's missile and satellite programs remain active despite economic headwinds, and that the government continues to prioritize military spending. While there are no official figures on the exact cost of Iran's space and missile programs, their apparent continuation underscores Tehran's determination to emphasize military readiness despite external economic pressures. Legislative developments, combined with official military declarations, demonstrate a comprehensive alignment between Iran's defense policy, national security doctrine, and budgetary strategy. Whether these measures achieve the desired deterrent effect or contribute to greater regional instability remains a question for future developments, but Iran's current posture demonstrates a readiness to institute long-term defense mobilization regardless of international constraints or internal economic costs.
Over the past five years, Iran has expanded its armed forces through personnel strengthening and institutional restructuring across all branches of service. The conventional armed forces currently comprise approximately 610,000 active-duty personnel and 350,000 reservists, totaling approximately 960,000, excluding paramilitary components. The Islamic Revolutionary Guard Corps (IRGC) fields approximately 300,000 personnel, including special ground forces, naval units, and the Aerospace Force. The Law Enforcement Command (FARAJA) adds further capacity, and the Basij, as an auxiliary mobilization force, reportedly has a membership ranging from several hundred thousand to potentially several million. This framework allows Iran's defense establishment to maintain a large pool of personnel with varying levels of training and readiness, enabling troop rotation, regional deployment, and support for strategic depth across internal and external theaters of operations.
Iran has prioritized domestic equipment production alongside limited foreign procurement to develop and modernize its military inventory. The Defense Industries Organization (DIO) and the Iranian Electronic Industries (IEI) lead the country's manufacturing efforts, supported by some 3,150 domestic companies and 92 academic and technical institutions. The official claim of 90 to 93 percent self-sufficiency is based on the ability to manufacture a wide spectrum of systems, including armored vehicles such as the Zulfiqar main battle tank and Rakhsh APC, artillery platforms, tactical ballistic missiles such as the Fath-360, and UAVs such as the Mohajer-6, Mohajer-10, and Kaman-22. In parallel, Iran confirmed the acquisition of Russian Su-35 fighter jets in January 2025, although the number delivered and their integration into service have not been independently verified. In the naval sector, key developments include the Shahid Soleimani-class catamaran corvette, equipped with missile and air defense systems, and the IRIS Shahid Bagheri, a 41,000-ton converted container ship configured as an unmanned aerial vehicle launch platform, with surveillance, missile, and rotary-wing capabilities.
Iran's military posture continues to rely on affiliated non-state actors across the region, supported by the IRGC's Quds Force. Iranian military equipment, including UAVs, missiles, and communications systems, has been supplied to groups such as Hezbollah in Lebanon, the Houthis in Yemen, and various militias in Iraq, Syria, Gaza, and Sudan. Iranian drones, particularly models such as the Shahed-136, Mohajer-6, and Ababil, have been used in conflicts outside the region, including in Ukraine, where Russian forces have deployed Iranian-supplied systems or derivatives. Between 2022 and 2024, production levels increased and export activity expanded. In parallel, Iran has developed and deployed new electronic warfare and cyber capabilities, with the IEI reporting the introduction of thousands of systems related to command and control, surveillance, and communications. Satellite integration and unmanned systems coordination have also advanced, supporting the implementation of ISR and broader precision strike capabilities. This combined effort in personnel, equipment, proxy force support, and technical modernization is a core feature of Iran's military development between 2020 and 2025.
