NEW DELHI: India has raised strong objections to the International Monetary Fund’s (IMF) continued financial support to Pakistan, warning of the risk of misuse of funds for state-sponsored cross-border terrorism and highlighting Islamabad’s poor track record of economic reform and programme implementation.
During the IMF’s review of the USD 1 billion Extended Fund Facility (EFF) and consideration of a fresh USD 1.3 billion Resilience and Sustainability Facility (RSF) for Pakistan, India abstained from the vote, citing deep concerns over the credibility and impact of IMF programmes in the country.
India flagged Pakistan’s prolonged and repeated borrowing from the IMF over the past three decades, 28 out of 35 years since 1989, underscoring the ineffectiveness of the Fund’s engagement in delivering sustainable economic reform. Notably, in the last five years alone, Pakistan has received four separate IMF programmes.
India questioned whether the failure lies in Pakistan’s lack of implementation, the IMF’s programme design, or weak monitoring. Officials also highlighted the Pakistan military’s extensive control over economic decisions, even under the current civilian government, which has raised fears of policy slippages and reform reversals.
Citing a 2021 UN report describing military-linked enterprises as Pakistan’s “largest conglomerate”, India expressed concern that the army’s dominant role in the economy continues, now formalised through the Special Investment Facilitation Council.
India also drew attention to the IMF’s own evaluation report, Evaluation of Prolonged Use of IMF Resources, which acknowledged widespread perception of political influence in lending decisions regarding Pakistan. It warned that repeated bailouts have rendered Pakistan a “too big to fail” debtor, posing reputational risks to the IMF and global lenders.
More gravely, India stressed the risk that fungible IMF funds could be diverted towards sponsoring cross-border terrorism. “Rewarding such behaviour sends a dangerous message, undermines global values, and exposes donors to serious reputational risks,” Indian officials said, calling for moral considerations to be integrated into global lending frameworks.
While several member countries reportedly echoed India’s concerns, the IMF’s response remained limited by procedural formalities. The Fund, however, formally noted India’s statements and its abstention from the vote.