IMF Defends $1 Billion Bailout to Pakistan Amid India’s Objections Over Terror Links

By A Staff Reporter

NEW DELHI – In a move that has sparked diplomatic friction, the International Monetary Fund (IMF) on Thursday defended its decision to approve a $1 billion loan instalment to Pakistan under its Extended Fund Facility (EFF), dismissing India’s strong objections.

India had urged the IMF to reconsider the disbursement, citing Pakistan’s continued support for cross-border terrorism. The call for reassessment came in the wake of Operation Sindoor, a recent Indian military offensive that targeted terror infrastructure in Pakistan and Pakistan-occupied Kashmir (PoK).

Defence Minister Rajnath Singh publicly criticized the IMF's financial support to Islamabad, calling it "indirect funding to terror" and cautioning global institutions against enabling what he described as “state-sponsored violence.”

Responding to these concerns, IMF communications director Julie Kozack said, “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 programme.”

Kozack elaborated on the review process, noting that on March 25, 2025, IMF staff reached a Staff-Level Agreement with Pakistani authorities following the first review of the program. This agreement was ratified by the IMF Executive Board on May 9, leading to the disbursement of the $1 billion loan tranche.

“This is part of a standard procedure,” she emphasized. “Our Board conducts periodic reviews to assess if programs are on track. In Pakistan’s case, the required reforms and targets were met.”