ISLAMABAD: Pakistan and Saudi Arabia are engaged in high-level discussionsto convert approximately $2 billion in existing Saudi loans into a majorprocurement deal for JF-17 Thunder fighter jets, according to reliablesources familiar with the negotiations. This potential agreement comes at acritical juncture when Pakistan grapples with severe economic pressureswhile the Kingdom seeks to diversify its defence partnerships amid shiftingregional security dynamics. The talks, which have gained momentum followingthe signing of a mutual defence pact last year, signal a strategic pivotthat could reshape military ties between the two longstanding allies andprovide Islamabad with much-needed financial relief.
The proposed transaction revolves around the JF-17 Thunder, a lightweightmultirole combat aircraft jointly developed by Pakistan AeronauticalComplex and China’s Chengdu Aircraft Corporation. Sources indicate that thedeal could involve the supply of JF-17 Block-III variants, equipped withadvanced features such as active electronically scanned array radar andenhanced weapon integration capabilities. One source suggested the overallpackage might reach $4 billion, incorporating additional equipment andsupport systems beyond the loan conversion component. This structure wouldallow Pakistan to offset debt obligations while bolstering its defenceexport ambitions.
Saudi Arabia’s interest in the JF-17 stems from its proven performance inoperational environments. The aircraft has been combat-tested during theMay 2025 India-Pakistan conflict, where it demonstrated effectiveness inboth air-to-air and air-to-ground roles. Analysts highlight itscost-effectiveness compared to Western alternatives, making it attractivefor nations aiming to modernise air forces without excessive expenditure.Retired air marshal Amir Masood noted that the JF-17’s marketability hassurged due to its combat validation and affordability, positioning itfavourably against more expensive platforms.
Recent diplomatic engagements have further fuelled speculation about thedeal. Pakistan’s Air Chief Marshal Zaheer Ahmed Baber Sidhu visited SaudiArabia for bilateral talks focused on military cooperation, as reported bySaudi media. These discussions build on longstanding relations, wherePakistan has provided training and advisory support to Saudi forces, andRiyadh has extended financial assistance during Pakistan’s economic crises.In 2018, Saudi Arabia offered a $6 billion package, including deposits anddeferred oil payments, underscoring the deep interdependence between thetwo nations.
The negotiations occur against a backdrop of regional uncertainties. SaudiArabia is recalibrating its security posture to hedge against potentialfluctuations in U.S. commitments in the Middle East, particularly followingrecent geopolitical developments. The mutual defence pact signed last year,prompted by heightened tensions in the Gulf region, provides a frameworkfor expanded cooperation. Converting loans into tangible defenceacquisitions aligns with both countries’ interests: Pakistan gains exportrevenue and debt relief, while Saudi Arabia secures a reliable,battle-proven platform to enhance its air capabilities.
Pakistan’s defence industry has experienced significant growth in exportsrecently. Officials report securing contracts and memoranda ofunderstanding worth billions in 2025, involving multiple nations acrossAfrica, Asia, and the Middle East. The JF-17 program stands at theforefront of this push, with successful deliveries to countries likeAzerbaijan, Myanmar, and Nigeria. Industry experts emphasise that theaircraft’s iterative development—from Block-I to the advanced Block-III—hasincorporated modern avionics, precision-guided munitions, and improvedsustainability, making it competitive in the global market.
This potential Saudi deal could mark a milestone for Pakistan’s defencesector. By monetising domestic production capabilities, Islamabad aims toreduce reliance on external financial support, including ongoing IMFprogrammes. Defence Minister Khawaja Asif has highlighted that provenplatforms like the JF-17 are driving international demand, potentiallyenabling Pakistan to achieve greater economic self-reliance in the nearfuture.
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However, the talks remain in preliminary stages, with no officialconfirmation from either government. The military and finance ministrieshave yet to respond to inquiries, and Saudi authorities have maintainedsilence on the matter. Observers caution that while the framework appearspromising, finalisation will depend on technical evaluations, pricingagreements, and broader strategic considerations.
The evolving Pakistan-Saudi defence relationship reflects broader trends inregional security architecture. As both nations navigate complexchallenges, innovative financing mechanisms like loan-to-asset conversionscould become a model for future collaborations, strengthening bilateralbonds while addressing immediate economic and defence priorities.
Source:https://www.reuters.com/world/asia-pacific/pakistan-saudi-talks-jf-17-jets-for-loans-deal-sources-say-2026-01-07/
Tags: Pakistan, Saudi Arabia, JF-17 Thunder, Pakistan Air Force, MutualDefence Pact
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