The International Monetary Fund (IMF) has firmly defended its recent $1 billion bailout to Pakistan, dismissing India’s strong objections and citing that Islamabad has fulfilled all necessary conditions. While India has raised concerns that such financial assistance may be misused, particularly to fund cross-border terrorism, the IMF maintains that Pakistan has complied with the requirements under the ongoing loan programme.
IMF Stands by Its Decision
Speaking during a press briefing, IMF Communications Director Julie Kozack clarified that the loan was disbursed only after Pakistan met all the targets outlined under the Extended Fund Facility (EFF) programme. Approved in September 2024, this programme has so far delivered around $2.1 billion to Pakistan. Kozack noted that a staff-level agreement for the first review of the programme was reached in March 2025 and subsequently approved by the IMF Executive Board on May 9.
“Our Board found that Pakistan had indeed met all of the targets. It had made progress on some of the reforms, and for that reason, the Board went ahead and approved the program,” she stated.
The new tranche is part of a broader IMF strategy aimed at stabilizing Pakistan’s economy, which has been grappling with mounting debt and structural weaknesses. Reports also suggest that the latest disbursement came with 11 new conditions, including parliamentary approvals, increases in electricity surcharges, and the removal of import restrictions.
India’s Protest and Security Concerns
India has formally protested the bailout, expressing concern that IMF funds could be diverted to support activities detrimental to regional security. Defence Minister Rajnath Singh labeled the assistance as a form of “indirect funding to terror.”
On May 9, just a day before a scheduled ceasefire between India and Pakistan, New Delhi reiterated its stance, pointing out that Pakistan has repeatedly relied on IMF assistance—receiving funds in 28 out of the past 35 years. An official Indian government statement criticized the IMF’s approach, questioning the efficacy of previous programmes in achieving sustainable economic reforms in Pakistan.
Despite India abstaining from the IMF board vote and voicing its objections, the loan was approved and disbursed as planned. The development has further strained diplomatic ties between the two neighbouring countries amid ongoing tensions.
