On September 19, 2025, India awoke to a diplomatic challenge that few in New Delhi had anticipated: Saudi Arabia and Pakistan, two major players in South Asia and the Middle East, signed a strategic mutual defence agreement. For many observers, this pact marks a significant recalibration in the region’s security architecture, with ripple effects destined to reach India’s foreign policy establishment. But what does this new alliance mean for India, and what deeper stories from Pakistan’s own past echo through these developments?
The agreement, as reported by Devdiscourse, contains a sweeping provision: an attack on either Saudi Arabia or Pakistan will now be considered aggression against both. This clause, reminiscent of classic mutual defence pacts, signals a tightening of military and strategic bonds between Riyadh and Islamabad. For India, which has cultivated a complex and multi-dimensional relationship with Saudi Arabia over the years, the move is a clear signal that the diplomatic chessboard is shifting.
Prominent Indian diplomat Ashok Kantha did not mince words about the potential implications for India. “The agreement’s provision that considers an attack on either nation as aggression against both is concerning,” Kantha told Devdiscourse. Yet, he was quick to add a note of reassurance, emphasizing the “enduring importance of India’s multi-faceted relationship with Saudi Arabia.” In his view, while the new pact may complicate matters, the strength and depth of India-Saudi ties should not be underestimated.
Still, the Indian Ministry of External Affairs is not taking any chances. As of September 19, officials are studying the agreement’s implications for both national security and regional stability. The stakes are high: India’s foreign policy in the Gulf has always walked a fine line, balancing energy needs, the welfare of millions of Indian expatriates, and the ever-present shadow of Pakistan’s influence. Now, that balancing act is set to become even more intricate.
Veteran diplomat Venu Rajamony, also speaking to Devdiscourse, offered a frank assessment: “Saudi Arabia is not abandoning Pakistan.” For New Delhi, this means that old assumptions about Riyadh’s willingness to tilt toward India—especially in moments of tension with Islamabad—may need to be revisited. The new defence agreement, Rajamony argued, “complicates India’s foreign policy” and demands a deft, nuanced response.
But while the headlines focus on the diplomatic maneuvering of 2025, it’s impossible to ignore the deeper, more persistent storylines that have shaped Pakistan’s relationship with both its military and its strategic partners. To understand today’s developments, one must look back at the legacy of “Milbus”—the intertwining of military and business interests in Pakistan—a phenomenon laid bare by scholar Ayesha Siddiqa in her groundbreaking 2007 book, Military Inc.: Inside Pakistan’s Military Economy.
When Siddiqa published her exposé, the backlash was swift and severe. Then-president Pervez Musharraf branded her a traitor, blocked her book launch, and even threatened her with treason charges. Her “crime,” as Military Inc. revealed, was to shine a light on the hidden business empire of Pakistan’s armed forces. Central to her narrative was the Bahria Foundation, the Navy’s welfare trust, whose foray into real estate during the 1990s became a textbook case of how military capital could morph into private gain for senior officers.
The story of the Bahria Foundation’s partnership with developer Malik Riaz is especially instructive. In the mid-1990s, the Foundation entered a real estate venture with Riaz, contributing no financial capital but securing 10% of company shares and a quarter of all developed plots. Even more striking, Riaz was allowed to buy out the Foundation’s share at a fixed rate of just 100,000 Pakistani Rupees per plot—a sum well below the anticipated market value post-development. The Navy’s name lent credibility to the project, while Riaz gained a powerful patron and a brand. The risk for the Foundation was minimal, but the potential rewards for its officers—should property values soar—were enormous.
By 1997, however, trouble was brewing. Allegations of fraud and kickbacks to naval officers surfaced, leading to Riaz’s arrest and investigations by both the Navy and the Inter-Services Intelligence (ISI) agency. For a brief moment, it seemed the deal might unravel. Yet the momentum of these inquiries faded quickly. No formal convictions followed. Admiral (retd.) Fasih Bokhari, then Chief of Naval Staff, announced that “nothing adverse was found” regarding the allegations. But as Military Inc. and subsequent reporting have pointed out, this exoneration was hardly convincing. If there was truly nothing amiss, why the need for arrests and legal wrangling?
The dispute over the Bahria name and insignia eventually reached Pakistan’s Supreme Court, which in 2001 ruled in Riaz’s favor. The court’s logic was blunt: Riaz’s investments were too deep to undo, so he could continue using the Bahria brand. The Navy, meanwhile, launched its own rival scheme under the “Naval Anchorage” label, and the episode was quietly swept under the rug. For Siddiqa, the entire affair demonstrated how the military’s prestige could be monetized, exposing officers to conflicts of interest and opportunities for personal enrichment.
The state’s response to Siddiqa’s revelations was telling. Rather than engage with her findings, authorities chose to silence her. Musharraf’s threats and the forced cancellation of her book launch served as a warning to others: probing too deeply into military business was fraught with risk.
Fast-forward to 2025, and the Bahria Foundation’s reach has only expanded. Its ventures now span maritime services, dredging, shipping, education, bakeries, IT firms, and real estate projects. Yet, as critics note, virtually none of these enterprises are publicly listed or subject to independent audits. Revenues remain shielded from scrutiny under the guise of welfare, allowing the Foundation to operate as a commercial giant in the shadows. Procurement irregularities flagged by Pakistan’s Auditor General, tax exemptions granted without oversight, and the seamless migration of retired officers into corporate boardrooms all suggest that the culture of “Milbus” is alive and well.
For India, these internal dynamics within Pakistan’s military economy are more than just academic curiosities. They shape the incentives, power structures, and strategic calculations of a neighbor whose actions now have the explicit backing of Saudi Arabia in matters of defence. As New Delhi weighs its response to the new Saudi-Pakistan pact, it must also grapple with the enduring realities of Pakistan’s military-business complex—a force that, for decades, has blurred the lines between public duty and private gain.
As the dust settles on this latest diplomatic development, one thing is clear: India’s foreign policy must adapt not only to shifting alliances abroad but also to the entrenched interests and legacies that shape its rivals at home and in the region.
