Despite defence pact with Pakistan, India remains Saudi's key trade partner

Saudi-Pakistan defence pact underlines Islamabad's reliance on Riyadh, while India's ties rest on larger trade and diversified remittances

On 17 September, Saudi Arabia and Pakistan signed a “Strategic Mutual Defence Agreement” during Prime Minister Shehbaz Sharif’s visit to Riyadh, formalising their security ties. Riyadh clarified that the pact does not affect its strong relationship with India. Economically, Saudi Arabia is vital to both countries—but in different ways: Pakistan shows concentrated reliance, while India benefits from scale and diversification. 

 

Saudi Arabia’s share in Pakistan’s imports nearly doubled in a span of five years to 8.9 per cent in 2023, showing growing reliance. India’s share is smaller, but in absolute terms trade is far larger. Saudi is India’s fourth-largest trading partner. 

 

  

Exports to Saudi Arabia have stayed in almost the same proportion of total exports by both the countries.

 

 

Saudi Arabia contributes nearly a quarter of remittances sent to Pakistan, making it the single largest source. For India, Saudi’s share has fallen by almost five percentage points to 6.7 per cent in 2023, making it the fourth-largest source, with the United States as the largest.

 

 

Over 1.8 million Pakistanis and 1.9 million Indians work in Saudi Arabia. With Pakistan's population way lower than India's, a much higher proportion of the former work in Saudi Arabia. As such, labour flows support remittances for both, but Pakistan depends more heavily.