Pakistani ship captain detained on suspicion of smuggling Iranian missile components faces US trial

This undated photograph released by the US military's Central Command shows what it is described as the vessel that carried Iranian-made missile components bound for Yemen's Iran-backed Houthi rebels in the Arabian Sea. (US Central Command via AP)
Short Url
Updated 28 February 2024
Follow

Pakistani ship captain detained on suspicion of smuggling Iranian missile components faces US trial

  • The vessel is said to have started its journey from Pakistan and had advanced conventional weaponry for Houthi rebels
  • The US Central Command says it is the first seizure of Iranian-supplied weapons to the groups since their strikes began

RICHMOND: A Pakistani national who US officials say was the captain of a ship carrying Iranian-made missile components to Houthi rebels in Yemen was ordered Tuesday to remain behind bars as he awaits trial on charges of attempting to smuggle a warhead and other weapons, and lying to US Coast Guard officers as they boarded the boat.

Two Navy SEALs drowned while boarding the unflagged vessel in the Arabian Sea on Jan. 11 in the wake of continued Houthi attacks on commercial and military ships in the Red Sea and the Gulf of Aden.
In court documents, federal prosecutors said the boat’s captain, Muhammad Pahlawan, refused to slow the ship when the US Navy began its boarding attempt and “shouted for the crew to burn the boat before the Navy could board it.”

The ship was described as a dhow.

“Rather than turn the engine off, however, Pahlawan told crewmembers not to stop the dhow while the Navy was approaching,” court documents stated. “In fact, Pahlawan tried to make the dhow go faster. Finally, another crewmember, not Pahlawan, stepped up to the engine and stopped the boat.”

US officials said Navy Special Warfare Operator 1st Class Christopher J. Chambers slipped into the gap created by high waves between the vessel and the SEALs’ combatant craft.

As Chambers fell, Navy Special Warfare Operator 2nd Class Nathan Gage Ingram jumped in to try to save him, according to US officials familiar with what happened. The SEAL who jumped in after the other operator in a rescue attempt was following protocol, according to court documents.

Efforts to find and rescue the two SEALs were unsuccessful and they were later declared dead by the Navy.

During a detention hearing in US District Court in Richmond, Virginia, on Tuesday, FBI Special Agent Lauren Lee testified that Pahlawan initially said he was the boat’s engineer and that the captain had gotten off the ship. He also said he was not aware of any cargo on the ship, Lee said. She said he later contradicted himself, saying, “I am in command of the boat.”

Assistant US Attorney Troy Edwards Jr. argued that Pahlawan should remain in custody pending trial because he is a danger to the community and poses a serious risk of flight. Edwards said Pahlawan has no ties to the US and that the most serious charge against him — intentionally transporting a warhead knowing it would be used by Houthi rebel forces — constitutes a federal crime of terrorism and carries a maximum prison sentence of 20 years.

The charge of making material false statements carries a maximum of five years in prison.

Pahlawan’s attorney, Assistant Supervisory Federal Public Defender Amy Austin, suggested that the interpreter used by US officials when they were questioning crew members on the boat may not have spoken Punjabi, Pahlawan’s language. Lee said she did not know which language the interpreter spoke, but she said Pahlawan answered questions posed to him by the interpreter during sometimes hours-long interviews.

During a search of the ship, US forces found and seized Iranian-made advanced conventional weaponry, including critical parts for medium-range ballistic missiles and anti-ship cruise missiles, a warhead, and propulsion and guidance components, an FBI agent wrote in an affidavit. The agent said the items found are consistent with weaponry used by Houthi rebel forces in recent attacks on merchant ships and US military ships.

The affidavit quoted US Central Command, which stated that it was the first seizure of “Iranian-supplied advanced conventional weapons” to the Houthis since their strikes began in November.

The rebels have repeatedly targeted ships in the Red Sea and surrounding waters over Israel’s war against Hamas in the Gaza Strip. They have frequently targeted vessels with tenuous or no clear links to Israel, imperiling shipping in a key route for trade among Asia, the Mideast and Europe.

Three other crew members were charged with providing false information to US Coast Guard officers. They were also ordered detained following detention hearings Tuesday.

Specifically, the men lied about Pahlawan’s identity as captain, the weapons on board and the ship’s departure from Iran, court documents stated. The men had claimed their voyage’s origin was Pakistan.

Their attorneys have declined to comment.

Another 10 crew members are being detained under the federal material witness law. It allows courts to issue warrants for the arrest and detention of a person if their testimony is “material in a criminal proceeding,” and if it “may become impracticable to secure the presence of the person by subpoena.”

The FBI affidavit states that crew members had been in contact multiple times by satellite phone with a member of Iran’s paramilitary Revolutionary Guard.


Pakistan calls on US, UK to urge India to come for dialogue at neutral location

Updated 10 June 2025
Follow

Pakistan calls on US, UK to urge India to come for dialogue at neutral location

  • After brokering May 10 ceasefire, US had said Pakistan and India had agreed “to talks on a broad set of issues at a neutral site”
  • Weeks after worst military confrontation in decades, India and Pakistan have dispatched top lawmakers to press their cases in US, UK

ISLAMABAD: The head of an official delegation visiting London to present Islamabad’s position following a recent military standoff with New Delhi said on Tuesday the United States and the United Kingdom should encourage India to come for dialogue at a neutral location.

Weeks after their worst military confrontation in decades, India and Pakistan dispatched top lawmakers to press their cases in the United States, where President Donald Trump has shown eagerness for diplomacy between them. The Pakistan delegation is currently in London in the next stop of its mission and will go onwards to Brussels.

Gunmen on April 22 massacred 26 tourists on the Indian-administered part of Kashmir in the deadliest attack on civilians in decades in the scenic region that has seen a long-running insurgency and is disputed between India and Pakistan since 1947. India accused Pakistan of backing the assailants — which it denies — and launched strikes on Pakistani territory.

More than 70 people were killed in missile, drone and artillery fire on both sides for around four days before the US and other allies brokered a ceasefire on May 10. US secretary of state Marco Rubio also said at the time the two nations had agreed “to start talks on a broad set of issues at a neutral site.” He did not specify when the talks would take place or where.

“As part of our achieving this ceasefire, it was agreed at the time that going forward, we would have a dialogue at a neutral location, covering all friction points,” said Bilawal Bhutto Zardari, the head of the Pakistani delegation and the scion of the political Bhutto dynasty.

Bhutto Zardari, who was speaking to BBC Radio, said it seemed from recent statements by Indian leaders and actions of the government in New Delhi that they were not in favor of pursuing talks.

“We still believe that the United States and other allies can engage with India as a friend and explain to them that these decisions are not in their interest,” he said. “Similarly, here in the United Kingdom, you have a long history with India and Pakistan. [Disputed] Kashmir is the unfinished agenda of the partition [of India and creation of Pakistan in 1947] and forms the root cause of our conflict.

“Your [UK] government too is well-placed to speak to the Indian government as a friend and explain to them that refusing to engage with their neighbor, for two nuclear-armed countries to have no dispute resolution mechanism, is not in anybody’s interest.”

Separately, Bhutto Zardari led Pakistan’s delegation in a discussion with the Financial Times Editorial Board in London.

“We reaffirmed Pakistan’s abiding commitment to peace, emphasizing that dialogue, not domination, remains the only sustainable path forward with India,” the leader wrote on X.

“Expressed grave concern over the erosion of strategic stability: India’s violations of the Indus Waters Treaty, the weaponization of water, and the dangerous descent toward conflict in a nuclearized region, a trajectory that threatens to condemn future generations to perpetual insecurity.”

 


Pakistan announces income tax relief for salaried class in FY2025-26 budget

Updated 10 June 2025
Follow

Pakistan announces income tax relief for salaried class in FY2025-26 budget

  • Tax rate for those earning between $2,128–$4,255 annually to be cut from 5% to 2.5%
  • Pakistan’s tax-to-GDP ratio remains below 10%, among the lowest in the region

ISLAMABAD: Pakistan announced significant income tax relief for the salaried class on Tuesday as it announced its federal budget for the fiscal year 2025-26, aiming to ease the burden on working people amid high inflation and economic uncertainty.

Pakistan’s tax-to-GDP ratio remains below 10%, among the lowest in the region. The government has pledged to raise this ratio to 14% through tax reforms, digital enforcement, and expanding the tax base.

“First of all, we are providing relief where it is most needed, relief for the salaried class,” Finance Minister Muhammad Aurangzeb, presenting his first full-year budget in the National Assembly, said.

“In this regard, there is a proposition for a significant reduction in the income tax slabs for the working class.”

Aurangzeb said the income tax rate for individuals earning between Rs600,000 and Rs1.2 million ($2,128–$4,255) annually would be cut from 5% to 2.5%.

“For those earning up to Rs22,000,000 [$7,788], the tax rate has been proposed at 11% instead of 15%. Similarly, those who earn a higher salary, there is a proposition of tax reduction,” the finance minister said.

“For those who are earning between Rs22,000,000 [$7,788] up to Rs32,000,000 [$11,328], the tax rate has been proposed to be reduced from 25% to 23%.”

For high-income earners making over Rs10 million ($35,460) annually, a 1% reduction in the additional surcharge has been recommended to help curb the ongoing brain drain, the minister said.

Aurangzeb described the changes as part of broader efforts to simplify the tax structure and “strike a balance between inflationary pressures and take-home pay.”

The federal budget, with a total outlay of Rs17.57 trillion ($62 billion), comes as Pakistan seeks to stabilize its economy under a $7 billion International Monetary Fund (IMF) bailout program approved last year.

The budget also includes a 20% increase in defense spending, while total government expenditure is expected to be 7% lower year-on-year compared to the last fiscal, reflecting fiscal consolidation goals tied to IMF negotiations.

The proposed budget will be debated in parliament before final approval.


Pakistan to raise defense spending by 20% in FY26 amid tensions with India

Updated 10 June 2025
Follow

Pakistan to raise defense spending by 20% in FY26 amid tensions with India

  • Pakistan unveils $62 billion budget, a 7% decrease in overall spending, debt servicing to consume half of total spending
  • Budget reflects attempt to balance security concerns with ongoing fiscal reform efforts under $7 billion IMF loan program

ISLAMABAD: Pakistan will increase defense spending by more than 20% in the 2025-26 fiscal year to Rs2.55 trillion ($9.04 billion) as it seeks to bolster military capabilities following the country’s worst confrontation with India in nearly three decades.

The move comes as the government unveiled a Rs17.57 trillion ($62 billion) federal budget on Tuesday, reflecting a 7% decrease in overall spending compared to the current fiscal year. The largest portion of the budget – Rs8.21 trillion ($29 billion), or nearly half of total expenditures – will go toward debt servicing, continuing to strain Pakistan’s fiscal space.

“National defense is the most important priority of the government,” Finance Minister Muhammad Aurangzeb said while presenting his first full-year budget in the National Assembly. “For this national duty, Rs2,550 billion [$9.04 billion] will be allocated.”

Pakistan’s defense budget for the outgoing fiscal year stood at Rs2.12 trillion ($7.44 billion). The increase comes weeks after a four-day military standoff with India in May, which erupted following an attack in Indian-administered Kashmir that left 26 Hindu pilgrims dead. New Delhi blamed Pakistan-backed militants, a charge Islamabad denied.

The two nuclear-armed neighbors exchanged missile, drone, artillery, and air strikes before agreeing to a ceasefire on May 10.

Aurangzeb said the budget was being presented “at a very important and historic moment when the nation in recent days showed extraordinary unity, determination and strength.”

“After the Pak-India war, India has threatened to block the flow of river water into Pakistan. India is trying to use water as a weapon. I want to make it clear that water guarantees Pakistan’s survival and no hindrance will be tolerated in this respect,” the finance minister added.

Fiscal consolidation under IMF watch

Pakistan remains under a $7 billion IMF loan program approved last year, and the budget reflects an attempt to balance security concerns with ongoing fiscal reform efforts.

The government has set a GDP growth target of 4.2% for the next fiscal year, while aiming to reduce the fiscal deficit to 3.9% of GDP. The economy grew just 2.6% in 2024/25, falling short of its 3.6% target due to weak agriculture and industrial output. Inflation is projected at 7.5%.

Security personnel shift boxes with copies of the 2025–26 fiscal budget outside the Parliament House in Islamabad, before the start of the budget session. (APP)

In a May 23 statement, the IMF said Pakistan had pledged to maintain fiscal consolidation while safeguarding “social and priority expenditures,” targeting a primary surplus of 1.6% of GDP in 2025/26.

Aurangzeb said the new budget aimed to “change the DNA of our economy” by boosting exports, building foreign exchange reserves, and promoting productivity to avoid recurring balance of payment crises.

Bridging the gap

The government expects total revenues of Rs11.1 trillion ($39 billion), leaving a Rs6.5 trillion ($23 billion) financing gap to be filled through domestic and external borrowing, as well as privatization proceeds. Privatization is expected to bring in Rs87 billion, while Rs106 billion ($376 million) is projected from foreign sources.

The Federal Board of Revenue (FBR) has been tasked with collecting Rs14.1 trillion of the projected Rs19.3 trillion in gross revenue, marking a 19% year-on-year increase.

Corporate employees watching television screens during presentation of Pakistan’s $62 billion federal budget for fiscal year 2025–26, in Islamabad. (APP)

Under the Public Sector Development Program (PSDP), Rs1 trillion ($3.5 billion) has been allocated, with Rs328 billion ($1.16 billion) earmarked for transport infrastructure projects. The government also set aside Rs113 billion ($399 million) for education and Rs32 billion ($113 million) for health care.

Aurangzeb also announced plans to grow IT exports to $25 billion over the next five years and forecast a rise in workers’ remittances to $38 billion by the end of the current fiscal year.

Mixed reaction from markets

The budget drew mixed reactions from analysts and market participants.

Muhammad Waqas Ghani, head of research at JS Global Capital Ltd., said the proposals prioritized “tax reduction, energy sector changes, and austerity” in line with the last two budgets.

He noted the construction sector was favored, while the auto industry was the most negatively affected.

“On equities, CGT (capital gains tax) remains at 15%, but income from loans will be taxed at 25% to encourage mutual funds to divert their funds toward the equity asset class,” Ghani said.

An elder man listening the 2025-26 federal budget speech live on his mobile phone at a roadside in Islamabad. (APP)

Amreen Soorani, head of research at Al Meezan Investment Management, said the budget proposals were largely in line with market expectations.

“While there are some discernible disparities in the taxation of various asset classes, the initial reaction from the listed equity market appears to be one of cautious optimism,” she told Arab News.

However, the Overseas Investors Chamber of Commerce and Industry (OICCI), which represents over 200 multinational companies in Pakistan, expressed disappointment, urging the government to overhaul tax structures to improve competitiveness and attract foreign investment.


Pakistan PM urges global powers to take ‘immediate action’ to end Israeli offensive in Gaza

Updated 10 June 2025
Follow

Pakistan PM urges global powers to take ‘immediate action’ to end Israeli offensive in Gaza

  • Over 54,000 Palestinians have been killed since Israel launched its latest military offensive in Oct. 7, 2023
  • Pakistan has for decades called for establishment of independent Palestinian state based on pre-1967 borders

ISLAMABAD: Pakistan’s Prime Minister Shehbaz Sharif on Tuesday urged world powers to take immediate action to end Israel’s military offensive in Gaza, saying he hoped innocent Palestinians would achieve their dream of freedom soon.

Over 54,000 Palestinians have been killed and much of the coastal enclave of Gaza devastated since Israel’s latest air and ground offensive began in October 2023, health authorities in Gaza say. 

“The oppression, cruelty and barbarism taking place in Palestine and Kashmir — no matter how much we condemn it, it is not enough” Sharif said while addressing a federal cabinet meeting. 

“But I believe this is a very critical time for the global powers to effectively use their influence to ensure a ceasefire in Palestine, because what is happening there is the shedding of innocent Muslim blood — the blood of little girls, children and parents.”

The Pakistani PM added:

“I have strong hope in Allah Almighty, God willing, that the people of Palestine will gain freedom, the people of Kashmir will gain freedom. They have made tremendous sacrifices.”

Pakistan has been calling for a ceasefire and unimpeded humanitarian access to Gaza since the latest war broke out. 

Pakistan, which does not recognize Israel, has for decades called for the establishment of an independent Palestinian state based on pre-1967 borders, with Al-Quds Al-Sharif as its capital.

Although nearly 150 countries have recognized Palestine statehood, most major Western powers including the United States, Britain, France, Germany and Japan, have not. 

Muslim countries that do not recognize Israel include Pakistan, Saudi Arabia, Iran, Iraq, Syria and Yemen.
 


Pakistan shares range bound amid uncertainty over budget announcement

Updated 10 June 2025
Follow

Pakistan shares range bound amid uncertainty over budget announcement

  • Index recorded intraday high of 970 points and low of 51 points, eventually closing at 122,024, gaining 383 points or 0.32 percent
  • Pakistan will unveil annual federal budget, seeking to kickstart growth while finding resources for hike in defense expenditure 

ISLAMABAD: The Pakistan Stock Market witnessed a range-bound session today, Tuesday, with the index fluctuating within a narrow band amid uncertainty surrounding the budget announcement. 

Pakistan will unveil its annual federal budget for the coming fiscal year on Tuesday evening, seeking to kickstart growth while finding resources for an expected hike in defense expenditure following a military conflict with India last month, the worst between the nuclear-armed neighbors in decades. 

Islamabad will also have to contend with remaining within the discipline of its International Monetary Fund program and the uncertainty from new trade tariffs being imposed by the United States, its biggest export market.

“The index recorded an intraday high of 970 points and a low of 51 points, eventually closing at 122,024 — gaining 383 points or 0.32 percent,” brokerage house Topline Securities said in its daily market review. 

“Market participation remained healthy, with total traded volume reaching 591 million shares and a traded value of PKR 21 billion.”

Media reports say the government is likely to present a 17.6 trillion rupee ($62.45 billion) budget for the fiscal year beginning July 1, down 6.7 percent from this fiscal year. It has projected a fiscal deficit of 4.8 percent of GDP, against a targeted 5.9 percent deficit in 2024-25, the reports say.

Analysts said they expect an increase of around 20 percent in the defense budget, likely offset by cuts in development spending.

Pakistan allocated 2.1 trillion Pakistani rupees($7.45 billion) for defense in the outgoing fiscal year, including $2 billion for equipment and other assets. An additional 563 billion rupees ($1.99 billion) was set aside for military pensions, which are not counted within the official defense budget.

The government of Pakistani Prime Minister Shehbaz Sharif has projected 4.2 percent economic growth in 2025-26, saying it has steadied the economy, which had looked at risk of defaulting on its debts as recently as 2023. Growth this fiscal year is likely to be 2.7 percent, against an initial target of 3.6 percent set in the budget last year.

Pakistan’s growth lags far behind the region. In 2024, South Asian countries grew by an average of 5.8 percent and 6.0 percent growth is expected in 2025, according to the Asian Development Bank.

With inputs from Reuters