India claims the former naval officer was "kidnapped" from Iran and said his execution would be an act of "premeditated murder."
Kulbushan Jadhav was arrested in March last year, "for his involvement in espionage and sabotage activities against Pakistan," according to a statement released by the Pakistan armed forces Monday.
The statement said Jadhav confessed that he was tasked by India's foreign intelligence agency, the Research and Analysis Wing (RAW), to "plan, coordinate and organize espionage / sabotage activities aiming to destabilize and wage war against Pakistan."
A military court found Jadhav guilty on two counts of espionage and sentenced him to death.
'Kidnapped'
India has vociferously objected to Jadhav's sentencing, saying consular officials were denied access to him during his trial, in defiance of international law.
New Delhi urgently summoned Pakistani diplomats Monday to discuss the case.
"Jadhav was kidnapped last year from Iran and his subsequent presence in Pakistan has never been explained credibly," the Indian foreign ministry said in a statement.
The foreign ministry previously claimed Jadhav, a former naval officer, was operating a business in Iran prior to his arrest in Pakistan.
Monday's statement said there was no "credible evidence" against Jadhav and described his sentence as "farcical."
If the sentence is carried out, the statement said, "the government and people of India will regard it as a case of premeditated murder."
More than 40 alleged Pakistani spies have been arrested in India since 2013, according to the government.
While India does retain the death penalty, and hundreds of people were sentenced last year, only three executions have been carried out since 2007, according to Amnesty.
'Headed for crisis'
Talat Hussain, an Islamabad-based defense analyst said Jadhav's sentence could have "a very major impact" on the India-Pakistan relationship and further aggravate ties.
"I think we are heading for a major crisis," he said. "This will not bode well for both the countries and the region."
Sophia Saifi reported from Islamabad, Pakistan; Sugam Pokharel reported from New Delhi, India. James Griffiths reported and wrote from Hong Kong.