Pakistan and Saudi Arabia are currently engaged in discussions over a potential defence agreement involving JF-17 fighter jets, according to two Pakistani sources familiar with the matter. The proposal centres on converting approximately $2 billion of existing Saudi loans to Pakistan into a purchase of these aircraft. This arrangement would not only alleviate Pakistan's financial pressures but also fortify military ties between the two longstanding allies.

The talks come amid Pakistan's acute economic challenges, including chronic balance-of-payments issues that have necessitated repeated interventions from the International Monetary Fund. Saudi Arabia, seeking to diversify its security partnerships amid uncertainties over US commitments in the Middle East, views the deal as a strategic move. The kingdom has historically provided financial lifelines to Islamabad, such as a $6 billion package in 2018 comprising central bank deposits and deferred oil payments.

JF-17 Thunder jets, jointly developed by Pakistan and China and manufactured in Pakistan, form the core of these negotiations. One source indicated that discussions are exclusively focused on these light combat aircraft, while another noted them as the primary option among broader possibilities. The overall deal could reach $4 billion, with an extra $2 billion allocated for additional equipment beyond the loan conversion.

This development follows a mutual defence pact signed between the two nations last September, which commits them to regard aggression against either as an attack on both. The pact was inked shortly after Israel's strikes on alleged Hamas targets in Doha, an event that rattled Gulf security dynamics. Pakistan's Air Chief Marshal Zaheer Ahmed Baber Sidhu recently visited Saudi Arabia to confer with Lieutenant General Turki bin Abdulaziz on bilateral defence cooperation, regional security, and future collaborations.

Retired Air Marshal Aamir Masood, an analyst, highlighted Pakistan's ongoing negotiations or finalised deals with six countries for JF-17s, electronic systems, and weaponry. He emphasised the jets' appeal due to their combat-tested status, notably during last year's intense clashes with India—the most severe fighting between the neighbours in decades. This real-world validation, combined with cost-effectiveness, bolsters the aircraft's export potential.

Pakistan has intensified its arms export drive in recent months to leverage its domestic defence industry. A landmark $4 billion deal with Libya's eastern-based Libyan National Army last month marked one of Islamabad's largest-ever sales, encompassing JF-17s and training aircraft. Talks with Bangladesh for similar JF-17 sales signal ambitions to extend beyond South Asia and the Middle East.

Pakistan's defence minister, Khawaja Asif, recently claimed that surging weapons orders could render IMF assistance obsolete within six months. The country operates under its 24th IMF programme worth $7 billion, following a $3 billion standby deal in 2023 that staved off default, bolstered by Saudi rollovers including $1.2 billion last year.

Historically, Pakistan has supported Saudi Arabia militarily through training and advisory roles, while Riyadh has reciprocated with economic aid during Islamabad's crises. This jets-for-loans framework exemplifies operationalising their deepened partnership, potentially reshaping regional defence economics.

Neither Pakistan's military, finance, nor defence ministries, nor Saudi Arabia's government media office, responded to comment requests. The sources spoke anonymously due to lack of authorisation, underscoring the sensitive nature of the preliminary talks.

For India, observing these developments carries strategic implications, given the JF-17's deployment against Indian forces last year and Pakistan's expanding export footprint. Riyadh's pivot could influence Gulf-India defence balances, while China's role in JF-17 production ties into broader trilateral dynamics involving Beijing, Islamabad, and now Gulf states. As negotiations progress, the deal may accelerate Pakistan's defence industrial growth and Saudi military diversification.

Based On ET News Report