India Urges IMF to Review Pakistan’s Programme Over Alleged Terror Funding

Indian Defence Minister Rajnath Singh on Friday urged the International Monetary Fund (IMF) to reconsider a $1 billion loan to Pakistan, alleging that the funds could be used to support terrorist activities—a claim strongly rejected by Islamabad as a sign of New Delhi’s desperation.

Tensions between the two nuclear-armed neighbours escalated last week in the worst military clashes in decades, resulting in around 70 fatalities before a ceasefire was reached on Saturday.

The confrontation was triggered by an attack on tourists in Indian Illegally Occupied Jammu and Kashmir (IIOJK) last month, which India claims was backed by Pakistan—an accusation Islamabad firmly denies.

Speaking to troops at an air force base in western India, Singh said: “I believe a significant portion of the $1 billion from the IMF will be used to fund terror infrastructure.”

believe any economic assistance to Pakistan is nothing less than funding terror.”

Despite India’s objections, the IMF last week approved a loan programme review for Pakistan, unlocking a $1 billion payment which the state bank said has already been received.

A fresh $1.4 billion loan was also approved under the IMF’s climate resilience fund.

India — which also represents Bhutan, Sri Lanka, and Bangladesh on the IMF board —abstained from the review vote with a statement from its finance ministry stating, “concerns over the efficacy of IMF programmes in case of Pakistan given its poor track record”.

“India was the lone country which tried to stop it and it failed. It again reflects Indian frustration. Trying to criticise an institution like IMF speaks about this desperation,” Pakistan’s foreign ministry spokesman Shafqat Ali Khan told reporters.

Pakistan came to the brink of default in 2023, as a political crisis compounded an economic downturn and drove the nation’s debt burden to terminal levels before being saved by a $7 billion bailout from the IMF which sparked further crucial loans from friendly nations.

Pakistan, which has long battled militancy within its borders, has faced scrutiny over its ability to combat illicit financing and in 2022 was put on an international money-laundering watchlist.

However, the Financial Action Task Force removed Pakistan from its so-called grey list in 2022 after “significant progress”.

Britain’s Foreign Secretary David Lammy met with his Pakistani counterpart Ishaq Dar in Islamabad on Friday, where the two discussed the ceasefire, according to a statement from Pakistan’s foreign ministry.

It came as the government also held ceremonies across the country to celebrate the military.

“Pakistan’s Armed Forces remain fully prepared and resolutely committed to defending every inch of our territory. Any aggression will be countered,” Prime Minister Shehbaz Sharif said while visiting troops on Thursday.

The disputed Muslim-majority region of Kashmir has been at the heart of several wars between the two neighbours.