The Aman-13 exercise, which began in the Arabian Sea on Monday, involves warships from 12 countries and observers from more than 20 others.
One of the main objectives of the wargame is to "display united resolve against terrorism and crimes in the maritime domain", the Pakistan Navy said in a statement.
Pakistan and the other countries will also work towards "information-sharing, mutual understanding and identifying areas of common interest."
Rear Admiral Khan Hasham Bin Saddique, the Commander of the Pakistan Navy fleet, said the use of sea routes for terrorism, human trafficking, smuggling and piracy are major concerns.
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"We need to make collective efforts to eliminate these for lasting peace in the region," he told the media earlier this week.
Shipping lanes in the Indian Ocean have been plagued by attacks by Somali pirates, who have hijacked dozens of ships and earned millions of dollars in ransom for their release.
The US Navy has sent the USS William P Lawrence, a Arleigh Burke-class destroyer, to participate in the multinational exercise.
Other countries that have sent warships include Australia, Bangladesh, China, Japan, Sri Lanka and Turkey.
Among the countries that have sent observers are Brazil, Canada, Egypt, Germany, the Maldives, Myanmar, Russia and Saudi Arabia.