Pak-Saudi trade corridor proposed

With Pakistan and Saudi Arabia recently sealing a historic defence pact, policymakers and business leaders are increasingly calling for the two nations to expand cooperation into structured economic frameworks that could reshape regional connectivity.

They believe that a Pak-Saudi Economic Corridor (PSEC), modelled on the China-Pakistan Economic Corridor, could be the natural next step to convert the momentum of the new security alliance into long-term economic dividends.

The idea of the corridor comes at a time when global trade routes are being realigned and both countries are seeking to diversify their economies. Saudi Arabia is pushing ahead with its Vision 2030 reforms to reduce reliance on oil and build a robust non-oil economy, while Pakistan is searching for sustainable investment streams to overcome energy shortages, revive its industrial sector, and boost exports. Against this backdrop, a framework like PSEC could integrate South Asia and the Middle East in new ways, opening fresh avenues for investment, jobs, and technology transfer.

Former SAARC Chamber of Commerce and Industry president Iftikhar Ali Malik, who has long advocated deeper Pakistan-Saudi ties, said the corridor would "consolidate bilateral relations, making them multidimensional." He argued that just as CPEC transformed Pakistan's infrastructure and energy outlook, PSEC could deliver a new wave of growth and integration, particularly if aligned with Saudi Arabia's Vision 2030 and Pakistan's development priorities.

Bilateral trade between the two countries has already shown an upward trajectory. In fiscal year 2024-25, Pakistan's exports to Saudi Arabia crossed $700 million, whereas imports stood at around $3.6 billion. Much of Pakistan's imports consist of oil and petrochemical products, but the trade relationship is gradually broadening, especially as Saudi investors explore opportunities in agriculture, mining, renewable energy, and information technology.

Agriculture and livestock are fast emerging as priority areas under the umbrella of Pakistan's Special Investment Facilitation Council (SIFC). Last year, a Saudi agribusiness firm signed an agreement to cultivate 5,000 acres of alfalfa fodder in Pakistan, to be exported to meet the Kingdom's growing demand for livestock feed. Industry insiders believe this pilot project could pave the way for larger ventures in corporate farming, dairy, and meat production, giving Pakistan a chance to tap into Saudi Arabia's food security drive.

Business leaders in Pakistan are also beginning to rally behind the idea. Ali Butt, a meat exporter to Saudi and UAE markets, described PSEC as a vital next step in the countries' shared future. "We have long seen how corridors change lives: roads, ports, logistics hubs, energy linkages hooked to power plants. If PSEC is built with careful planning and shared investment, Pakistan's farmers, livestock sector, young tech workers, and small manufacturers will all benefit in ways we have only dreamed of."

Economists also underline the corridor's potential to provide stability for investors. Macro economist Osama Siddiqi said the new defence pact is not just about military guarantees, but about trust. "That trust can now be channelled into pipelines, highways, ports, and joint ventures. Investors need certainty, and Saudi Arabia's involvement will give Pakistan that confidence."

Observers note that the strategic defence pact signed recently has altered the tone of bilateral relations, turning them from transactional to long-term and trust-based. It commits both countries to consider any aggression on one as aggression on the other, giving Pakistan unprecedented security guarantees from one of the region's most influential states. Economists argue that such a pact provides the confidence and stability needed for Saudi investors to pour long-term capital into Pakistan's infrastructure and industries.

Pakistan's geographic location at the crossroads of South Asia, the Middle East, and Central Asia gives it an advantage in shaping future linkages via Gwadar port, as it could shorten time and expand Riyadh's access to Asian markets. For Saudi Arabia, investing in Pakistan offers not only a return on capital but also strategic leverage in expanding its footprint into new markets. For Pakistan, Saudi investment promises to ease structural bottlenecks, create jobs, and build capacity in underdeveloped but resource-rich sectors like mining and agriculture.

Former SAARC chief said that the establishment of PSEC would not only enhance trade but also strengthen supply chain connectivity and skill development. "This corridor will be a beacon of cooperation between two brotherly nations as it will create opportunities for employment, technology transfer, and long-term prosperity, ensuring a win-win partnership for Pakistan and Saudi Arabia."