Saudi-Pak defence pact adds new layer to Gulf politics, India keeps its balance

By: Team India Tracker

For Pakistan, the pact comes against a backdrop of weak growth, heavy debt, and recurring IMF bailouts.

Saudi Arabia and Pakistan have signed a Strategic Mutual Defence Agreement, giving new form to a military partnership that dates back decades. The deal, announced on September 17, is designed to expand security cooperation as both countries confront a more uncertain regional environment. Within hours, Riyadh clarified the pact would not dilute its “strong and growing” relationship with India—a signal that the kingdom sees value in keeping its economic and strategic priorities distinct.

Pak’s reliance on Riyadh

For Pakistan, the pact is more than symbolic. Its economy remains fragile after years of fiscal strain, high debt, and repeated IMF bailouts. Saudi Arabia has often been a lifeline, extending deposits to the State Bank of Pakistan, offering deferred oil payments, and providing direct budgetary support.

The kingdom is also home to 26 lakh Pakistani workers, whose remittances exceeded $6.5 billion in 2024—Pakistan’s largest single source of foreign transfers. Defence ties are equally entrenched: Pakistani officers have trained Saudi forces since the 1960s, and Riyadh has consistently leaned on Islamabad’s security expertise.

The new pact strengthens these connections at a time when Saudi Arabia is hedging against shifting US defence commitments and seeking to broaden its portfolio of regional partnerships.

India’s broader partnership

If Pakistan’s ties with Riyadh are built on reliance, India’s are anchored in scale and diversification. In FY24, bilateral trade reached $41.9 billion, with Saudi Arabia supplying nearly 18 per cent of India’s crude imports. Investments are expanding too: the kingdom’s Public Investment Fund has pledged $100 billion toward Indian infrastructure, renewables, and technology.

Beyond energy, cooperation spans clean hydrogen, digital technology, and defence dialogue. Indian companies are eyeing opportunities in Saudi Arabia’s Vision 2030 projects, while Saudi Aramco has explored joint ventures in refining and petrochemicals. This multi-layered relationship makes India a strategically indispensable partner for Riyadh.

Why now?

The timing of the Saudi-Pakistan pact reflects heightened Gulf security concerns, from Iran tensions to instability in Red Sea shipping lanes. Analysts say it is less a binding alliance than a framework to signal deterrence and strategic flexibility. As one Gulf-based expert notes, “This is about options, not obligations.”

By formalising security ties with Islamabad, Riyadh reinforces a traditional relationship while underscoring its desire to supplement, not replace, US guarantees. Pakistan gains validation at a moment of economic fragility, while Saudi Arabia strengthens its image as a regional power able to cultivate multiple security partners.

Implications for India

For New Delhi, the pact does not alter fundamentals. India’s economic weight ensures Riyadh’s long-term incentives remain aligned with strengthening bilateral ties. Saudi officials have been explicit that cooperation with Pakistan will not come at India’s expense.

Still, the move underscores the Gulf’s evolving security calculus. India is already working to deepen partnerships across the region—not just with Saudi Arabia but also with the UAE, Egypt, and Oman—while engaging in multilateral frameworks like I2U2 (India, Israel, UAE, US) and the Quad.

Economics define the balance

The asymmetry is clear. Pakistan’s annual trade with Saudi Arabia totals less than $5 billion, compared with India’s more than $40 billion. Pakistan depends heavily on remittances and financial support, while India’s relationship is powered by energy flows, investments, and consumer scale.

For Riyadh, that creates distinct but complementary value propositions. Pakistan provides military expertise and manpower. India offers markets, stability, and long-term growth.

The long view

The Saudi-Pakistan pact highlights a new phase in Gulf politics: traditional US guarantees are no longer viewed as sufficient, prompting regional powers to widen their partnerships. For Islamabad, the agreement delivers reassurance. For New Delhi, it is a reminder to keep building economic and strategic depth in the Gulf. For Saudi Arabia, it reinforces a careful balancing act—ensuring the kingdom remains indispensable to both south Asian partners, each in different ways.