India’s Objection to Pakistan IMF Program Reportedly Ignored

The International Monetary Fund (IMF) has proceeded with its financial support package for Pakistan, effectively disregarding India’s formal objections over the program’s efficacy and alleged risks of funds being diverted.

According to multiple reports, India raised serious concerns ahead of the IMF Executive Board meeting in early May 2025, urging a review of ongoing loans to Pakistan. New Delhi abstained from the vote, the strongest form of dissent available under IMF rules, which do not permit a formal “no” vote, and submitted a detailed statement highlighting Pakistan’s poor track record of reforms.

Despite these objections, the IMF approved the disbursement of approximately $1 billion under the Extended Fund Facility (EFF) and advanced discussions on additional funding, including a Resilience and Sustainability Facility. The Fund stated that Pakistan had demonstrated “strong programme implementation” and continued economic recovery.

In its official statement, India pointed out that Pakistan has been a prolonged user of IMF resources, receiving disbursements in 28 out of the last 35 years. It described Pakistan as having become a “too big to fail debtor” for the Fund due to repeated bailouts and questioned the effectiveness of IMF program design and monitoring in Islamabad’s case.

India further warned that such assistance could free up Pakistan’s domestic resources, potentially enabling state-sponsored cross-border terrorism, a charge Islamabad has strongly denied. Indian Defence Minister Rajnath Singh publicly described the funding as “nothing less than funding terror.”

The IMF moved forward with the review and approvals, emphasizing that its decisions are based on technical assessments of economic performance rather than bilateral political disputes. Pakistani officials have welcomed the inflows, stating the program remains firmly on track.

While India, representing itself along with Bangladesh, Bhutan, and Sri Lanka on the IMF board, made its position clear, it was isolated in its opposition, with major stakeholders including the United States, European nations, and China reportedly supporting the continuation of support for Pakistan.

The episode underscores the limits of bilateral influence within multilateral financial institutions, where economic criteria and collective board decisions often prevail over individual member objections. Pakistan’s economy, burdened by high external debt and low reserves, continues to rely on such international support to stabilize its finances.