India Raises Alarm Over IMF’s Continued Financial Support To Pakistan, Flags Terror Finance Risks
India has raised strong objections to the International Monetary Fund’s (IMF) latest financial packages for Pakistan, questioning the country’s credibility and warning of potential misuse of funds for sponsoring cross-border terrorism.
At a key IMF meeting held on Friday, the Fund reviewed Pakistan’s existing $1 billion Extended Fund Facility (EFF) and considered approving a new $1.3 billion Resilience and Sustainability Facility (RSF). India, an active and responsible IMF member, expressed concern over the effectiveness of continued IMF support to Pakistan, given its history of poor implementation and failure to uphold program conditions.
India noted that Pakistan has received IMF disbursements in 28 of the last 35 years, including four separate programs since 2019 alone. “Had the previous programs succeeded in establishing a stable macroeconomic framework, Pakistan would not be seeking yet another bailout,” India stated, questioning the credibility of the IMF’s oversight mechanisms and Pakistan’s commitment to reform.
Highlighting deeper structural concerns, India also flagged the entrenched involvement of the Pakistani military in economic governance. A 2021 UN report identified military-linked businesses as Pakistan’s largest conglomerate—an issue that persists today, with the army playing a leading role in Pakistan’s Special Investment Facilitation Council. India cautioned that such interference increases the likelihood of policy slippages and reversals.
India also drew attention to the IMF’s own report on the “Evaluation of Prolonged Use of IMF Resources,” which acknowledged the perception that political factors influence IMF lending to Pakistan. With Pakistan’s debt burden at critical levels, India argued that the country is now seen as “too big to fail,” making repeated bailouts more likely.
Most critically, India warned that without strict safeguards, IMF funds—being fungible—could be diverted to support state-sponsored terrorism. “Rewarding such behavior sends a dangerous signal to the international community, exposes donors to reputational risks, and undermines the values global institutions are meant to uphold,” India said.
Though several countries reportedly shared India’s concerns, the IMF’s response was constrained by procedural limitations. India called for urgent reforms in the Fund’s decision-making processes to ensure ethical considerations are not sidelined.
India ultimately abstained from voting on the proposed IMF package and its concerns were formally noted in the proceedings.
