There is a huge potential to boost exports, including IT, textile, rice, seafood and leather goods
Gohar Ali Khan
September 22, 2025
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KARACHI: The signing of the Strategic Mutual Defense Agreement (SMDA) between Saudi Arabia and Pakistan has opened a new chapter in bilateral relations on various fronts, experts say.
There is much potential to boost investment and explore joint ventures, foreign direct investment, oil & gas energy cooperation and IT exports, according to economic nationalists and strategists.
Talking to
Business Recorder, they said it is expected that Pakistan’s textile, pharmaceutical, rice, sea food, meat, edible fruits and vegetable, dairy products, leather goods and information technology all have the potential to be exported to Saudi Arabia, which can be further developed after this defense pact.
They stressed that there is an urgent need to further deepen compliance of standards, and deal with a lack of information and lack of commercial activities between the countries.
Moreover, there is a need to negotiate trade impediments related to compliance, standardization, sanitary and phytosanitary standards (SPS), technical requirements, conformity assessment and rules of certificates of origins for enhancement of Pakistan’s exports to Saudi Arabia.
Saudi policy makers should also chalk out a comprehensive strategy for mutual recognition of standards for exports of surgical instruments, food items and pharmaceutical goods as there is a huge demand for these products in Saudi Arabia, they said.
Pakistan’s macro-economy
Speaking about the defence pact, economic strategist and regional expert Dr Mehmoodul Hassan Khan said: “Hopefully, the enhanced defence ties between the two countries will have positive implications for Pakistan’s macro-economy.“
“Additionally, extension of loans, provision of oil against deferred payments, buying of JF-17 Thunder, greater inflows of foreign direct investments and deeper trade should be expected after this historic defense pact which has become a paradigm shift.”
Moreover, the triangular Pakistan-Saudi-China partnership could be a game changer for the further strategic expansion of the Belt and Road Initiative-China-Pakistan Economic Corridor (BRI-CPEC) supporting agriculture, industrial, energy and space & sciences cooperation in the days to come.”
He also explained that chances of offering fertile land to potential Saudis investors, export of skilled labour and potential food security links, plus worker remittances would give Pakistan a chance to stabilize its economy through jobs, capital, and technology.
The immediate surge in Pakistan’s stock market after the pact reflecting investor confidence is likely to ease the country’s financial burden.
Dr Khan said it appears that the launch of the Saudi Oil Facility (SOF) will support Pakistan’s oil imports, helping to stabilize energy costs amid external financing challenges. This project will strengthen Pakistan’s economic resilience by securing a stable supply of petroleum products while reducing immediate fiscal burdens.
The facility is part of broader financial cooperation between Pakistan and Saudi Arabia, which has already placed $5 billion in deposits with the State Bank of Pakistan (SBP).
Moreover, the Saudi Fund for Development (SFD) has supported more than 40 projects and programmes valued at approximately $1.4 billion to finance energy, water, transportation and infrastructure projects in Pakistan.