ISLAMABAD: Indian media outlets have circulated reports claiming Saudi Arabia has demanded immediate repayment of a 6billion dollar loan from Pakistan citing failure to honour the bilateral defence pact.
The pact known as the Strategic Mutual Defence Agreement was signed in September 2025 and explicitly states that an attack on one country is considered an attack on both.
Unverified claims link the demand to recent Iranian missile and drone strikes on Saudi territory in late March 2026 during which Pakistan allegedly maintained a neutral stance without offering military support.
The reported loan breakdown includes three billion dollars in safe deposit at the State Bank of Pakistan plus 3.3 billion dollars in accumulated deferred oil payment facilities.
Pakistani government sources have dismissed the reports as baseless rumours spread by Indian media to sow discord between the two longstanding allies.
No official confirmation has emerged from Saudi authorities or international outlets while coverage remains confined to social media and regional Indian accounts.
Pakistan has historically depended on Saudi financial assistance with Riyadh extending a six billion dollar rescue package in 2018 comprising three billion dollars in deposits and three billion dollars in oil deferrals to stabilise foreign reserves.
In recent months Islamabad has actively sought extensions converting the five billion dollar deposit into a ten-year facility and expanding deferred oil credit from 1.2 billion to five billion dollars.
Analysts warn that any abrupt repayment could severely strain Pakistan’s external debt servicing which exceeds 20 billion dollars annually while foreign exchange reserves hover near 10 billion dollars.
The defence pact reaffirmed as recently as March 2026 after Iranian attacks saw Pakistani and Saudi leaders discuss joint measures under the agreement framework.
Decades of ties include Pakistani military training for Saudi forces and substantial Saudi investments in Pakistani infrastructure projects.
This episode recalls the 2020 diplomatic friction when Riyadh sought early repayment of one billion dollars amid differing regional views yet relations later reset with renewed oil facilities.
Pakistan’s economy faces mounting pressures from global oil volatility and debt obligations making any loan recall potentially inflationary and disruptive to imports.
Saudi Arabia maintains one of the region’s largest defence budgets exceeding 70 billion dollars annually underscoring the strategic value of the pact for joint deterrence.
Officials in Islamabad highlight ongoing economic cooperation talks including proposals to convert portions of loans into defence equipment such as JF-17 fighter jets valued at up to four billion dollars.
The absence of international media verification adds weight to Pakistani assertions that the claims lack substance and aim to exploit regional tensions.
As both nations navigate complex geopolitics the resilience of their alliance built on mutual security and economic interdependence remains under close watch.
The reported development if confirmed would mark a notable low in ties that have provided Pakistan critical buffers during past balance of payments crises.
Observers await formal statements from Riyadh to clarify the situation amid heightened regional instability from ongoing Iranian strikes on Gulf targets.