IN LATE 2025 and early 2026, Pakistan unveiled a series of high-profile defence export agreements, signalling a structural shift in its strategic and economic orientation. Most prominently, in December, Islamabad concluded a multibillion-dollar contract with Libya to supply the JF-17 Thunder fighter aircraft, co-developed with China and manufactured in Pakistan. Parallel negotiations for the fighter and other defence deals have been reported with Bangladesh, Saudi Arabia and Indonesia. Myanmar already operates Pakistani-manufactured aircraft. For the first time, Pakistan appears poised to emerge as a significant exporter of modern combat aircraft, signalling a departure from a past where it was massively reliant on imported arms and external military assistance.
At the core of this transformation is the Pakistan military’s effort to convert the country’s longstanding military-industrial infrastructure into a sustainable source of export revenue. Historically, Pakistan’s defence sector has been oriented towards import substitution and domestic force modernisation, and remained heavily dependent on foreign suppliers and concessional arrangements. The recent wave of export contracts indicates a deliberate attempt to reposition this sector as a driver of foreign exchange earnings, industrial upgrading and geopolitical leverage. In effect, Islamabad is using defence production not merely as a strategic necessity but as an instrument of economic statecraft.
Pakistan’s military and government are presenting this slew of deals as an economic success story – one that could help turn the country’s stumbling economy around. But the defence export boom has several domestic and economic consequences – from concentrating Pakistan’s resources further in the hands of the military to repositioning the country on the geopolitical stage, particularly in relation to the Gulf states.
GLOBAL DEMAND FOR the JF-17 shot up following the India–Pakistan conflict of May 2025, during which the aircraft and associated systems were deployed operationally by the Pakistani army and air force. While its claims of successful strikes remain somewhat contested, Pakistan has used the conflict to present the jet as “combat-proven”. In addition, the aircraft has received some critical technological upgrades that bring its performance closer to that of fighters manufactured in developed countries – even as it is available at a fraction of the cost as Pakistan has expanded domestic production and localised maintenance capabilities.