May 11, 2025

India abstained from voting on the IMF's $2.3 billion loan to Pakistan citing concerns over the misuse of funds for state-sponsored cross-border terrorism. The IMF was reviewing a $1 billion Extended Fund Facility (EFF) lending program and a $1.3 billion Resilience and Sustainability Facility (RSF) lending program for Pakistan. India expressed its dissent within the IMF's voting system which does not allow a formal 'no' vote. The Indian government stated that continuing to support cross-border terrorism sends a dangerous message to the global community and undermines global values. India also highlighted the need for moral values to be integrated into global financial institutions' procedures. The IMF acknowledged India's concerns and abstention. New Delhi called for a reevaluation of funds and loans to Pakistan by multilateral agencies like the IMF and requested the FATF to put Pakistan on the 'grey list'. India brought attention to the IMF Report on the 'Evaluation of Prolonged Use of IMF Resources' regarding Pakistan. The report raised concerns about political influences impacting IMF lending to Pakistan, leading to a high debt burden for Pakistan. India criticized Pakistan's poor implementation record and adherence to IMF program conditions, with multiple bailouts over the years. India questioned the effectiveness of IMF programs and Pakistan military's interference in economic affairs. Despite a civilian government, the military's involvement in politics and the economy poses risks of policy setbacks and reform reversals.

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Tags: Imf, India, Pakistan, Cross-border terrorism, Bailout,