The International Monetary Fund (IMF) has approved a $1-billion tranche for Pakistan under its $7-billion Extended Fund Facility (EFF), along with an additional $1.3 billion through the Resilience and Sustainability Facility (RSF). India abstained from voting during the IMF board meeting, expressing serious concerns about Pakistan’s “poor track record” and warning against potential “misuse of debt financing funds for state-sponsored cross-border terrorism,” according to an official statement from India’s Ministry of Finance.
India firmly opposed the loan disbursements, highlighting Pakistan’s repeated bailouts as a sign of failure in IMF programme design, monitoring, or Pakistan’s own implementation. Reuters quoted a statement from the Pakistan government confirming the IMF had released $1 billion in cash following the first review of the $7-billion programme. This brings the total disbursed so far to $2 billion.
A finance ministry release noted that fears of fungible IMF inflows being diverted for military use or cross-border terrorism were echoed by several IMF member nations.
Meanwhile, India’s abstention drew criticism from opposition parties. Congress MP Jairam Ramesh reminded that his party had urged the government to vote against the IMF loan. “India has only abstained. The Modi Government has chickened out. A strong NO would have sent a powerful signal,” he said.
However, government sources clarified that IMF protocols do not permit a formal “no” vote. While each of the 25 board members has voting rights proportional to their economic weight, the IMF functions primarily through consensus. In cases requiring a vote, members may only support or abstain — there’s no option to vote “against” a proposal.
India reiterated that Pakistan’s reliance on IMF bailouts — including four programmes since 2019 — raises questions about the success of earlier efforts. “As an active and responsible member, India raised concerns over the efficacy of IMF programmes in Pakistan, given its poor implementation record and risk of debt misuse for terrorism,” said the finance ministry.
The government also noted that Pakistan has received IMF disbursements for 28 out of the last 35 years, pointing to a persistent failure to achieve long-term economic reform. “Had the previous programmes been effective, Pakistan wouldn’t be seeking yet another bailout,” it emphasized.
India further warned that the Pakistani military’s dominant role in the country’s economic affairs threatens any potential reforms. “Even under a civilian government, the army continues to exert massive influence over domestic politics and economic policy,” the statement said.
Citing a 2021 UN report, the government described military-linked businesses as Pakistan’s “largest conglomerate,” adding that the army now plays a central role in the Special Investment Facilitation Council of Pakistan — a position that only reinforces its economic control.
India also referred to the IMF’s own evaluation report on prolonged use of its resources, which highlighted concerns that political factors heavily influence IMF decisions in Pakistan’s case. “Due to repeated bailouts, Pakistan has become a heavily indebted nation — paradoxically too big to fail for the IMF,” the statement said.
India’s Foreign Secretary Vikram Misri called on the IMF Board to reflect seriously before approving such bailouts. “The Board must look deep within and consider all facts before extending generous financial assistance,” he urged.
The $7-billion IMF programme for Pakistan, approved in September 2024, spans 37 months and includes six reviews.
