Negotiations are underway between Pakistan and Saudi Arabia that could see nearly $2 billion in Saudi loans converted into a defence deal centered on the JF‑17 Thunder fighter jet, a development that has the potential to reshape military and economic ties between the two countries. The talks, sources in Islamabad say, reflect both Pakistan’s urgent financial needs and Riyadh’s recalibration of its security partnerships in a Middle East where the role of the United States has become increasingly uncertain. According to officials familiar with the discussions, the proposed arrangement is part of a broader effort to operationalize a defence agreement signed last year. That pact, concluded in the aftermath of Israeli airstrikes on Hamas positions in Doha, was designed to cement cooperation between the two countries and ensure mutual support in times of regional tension.
While the current negotiations focus on the JF‑17, a domestically produced joint venture between Pakistan and China, other defence equipment could also be included. One source suggested that the overall deal could exceed $4 billion, with $2 billion used to restructure existing loans and the remainder earmarked for procurement of additional military hardware. Military insiders, speaking on condition of anonymity, stressed that the discussions are delicate and ongoing. Earlier this year, Air Chief Marshal Zaheer Ahmed Babar Sidhu, the head of the Pakistan Air Force, visited Riyadh to discuss the broad contours of bilateral military collaboration. The meetings reportedly explored ways to deepen joint training, operational coordination, and defence technology exchanges.
Retired Air Marshal Amir Masood, a defence analyst, told international media that Pakistan is negotiating or finalizing JF‑17 supply agreements with at least six countries, including Saudi Arabia. He highlighted the aircraft’s appeal on the global market, citing its combat-tested record during last year’s escalation with India and its cost-efficiency compared to other fighter jets. “The JF‑17 has proven itself in real operations, and its relatively low price makes it attractive to a number of regional partners,” he said. The deal comes against the backdrop of long-standing military and financial ties between Islamabad and Riyadh. The defence pact signed in September last year committed both sides to treat aggression against one as aggression against both, reinforcing a security framework that has historically involved Pakistan providing military training and advisory support to Saudi Arabia.
Financially, Saudi Arabia has periodically extended support to Pakistan, including a $6 billion assistance package in 2018 and subsequent deposit rollovers, such as $1.2 billion last year, which helped stabilize Pakistan’s foreign reserves. Analysts note that this pattern of support has been crucial in cushioning Pakistan during periods of economic volatility. Pakistan’s current economic challenges are stark. The country remains under a $7 billion International Monetary Fund program initiated in 2023, which helped avert a looming default. Gulf partners, including Saudi Arabia, have played a significant role in sustaining Pakistan’s reserves, yet domestic pressures and fiscal deficits persist. Against this backdrop, Islamabad has increasingly sought to leverage its defence production as a tool for both economic and strategic gain.
Defence Minister Khawaja Asif has been vocal about the potential of the defence industry to transform the national economy, noting that the country’s combat-tested aircraft could, with successful export deals, reduce dependence on international financial institutions within months. “Our aircraft have been proven in real combat situations,” he said. “The growing orders we are receiving may allow Pakistan to forgo IMF support in the near term.” Recent months have seen a string of high-value deals that illustrate this strategic pivot. A contract exceeding $4 billion with Libya’s eastern government last month included JF‑17 and trainer aircraft, while discussions with Bangladesh over potential sales continue. These agreements are not merely commercial transactions; they reflect a deliberate effort to convert Pakistan’s defence capability into economic leverage.
The JF‑17, relatively inexpensive but operationally versatile, has become emblematic of this approach. Its growing international profile not only strengthens Pakistan’s defence diplomacy but also signals a broader ambition to position the country as a credible supplier of modern military hardware. Beyond the financial and strategic implications, the negotiations underscore a deeper regional dynamic. Saudi Arabia, long reliant on Western defence support, is recalibrating its security relationships as Washington’s focus shifts amid ongoing geopolitical uncertainty in the Gulf and beyond. For Islamabad, securing a major defence agreement with Riyadh would reinforce its standing in a region marked by volatility, providing both a buffer against potential security threats and a measure of economic stability through defence exports.
The interplay of these factors demonstrates how economic necessity and strategic foresight are increasingly intertwined in Pakistan’s policy decisions. Observers caution, however, that these negotiations carry inherent risks. Defence deals of this scale require careful calibration, not just in terms of financing, but also in aligning military capabilities, operational doctrines, and long-term maintenance commitments. Islamabad and Riyadh will need to manage these technical and political considerations while navigating broader regional sensitivities, including the complex web of alliances, rivalries, and ongoing conflicts in the Middle East and South Asia. For Pakistan, the potential conversion of loans into a fighter jet deal represents more than just an economic or military transaction. It is a signal of intent: that the country is seeking to harness its indigenous defence capabilities as a driver of national resilience, while also reaffirming its strategic ties with a longstanding partner.
The outcome of these talks could have lasting implications, both for the defence industry’s role in Pakistan’s economy and for the broader geopolitical landscape, where alliances and economic interdependence are increasingly central to national security. In sum, these discussions illustrate the growing fusion of defence, economics, and diplomacy in Pakistan’s foreign policy. What was once purely a matter of financial support is now being transformed into a comprehensive strategy linking military capability, economic stability, and international partnership. For Islamabad, the stakes are high, but so too are the potential rewards: a successful deal could cement Pakistan’s role as a defence exporter, strengthen its relationship with Riyadh, and provide a measure of economic breathing room at a time when both are sorely needed.
