India Opposes IMF Aid to Pakistan Over Terror Links and Military Interference

India abstains from IMF vote on $2.3 billion assistance to Pakistan, warns global institutions of reputational risk in supporting state sponsors of terrorism

New Delhi [India], May 10: India has voiced strong opposition to the International Monetary Fund’s (IMF) approval of fresh funding to Pakistan, cautioning that providing financial support to a country with a long-standing record of cross-border terrorism and military interference in economic policy could harm the credibility of global institutions.

During the IMF’s recent board discussions on a $1 billion Extended Fund Facility (EFF) and a $1.3 billion Resilience and Sustainability Facility (RSF) for Pakistan, India abstained from voting. However, sources in the Indian government clarified that the abstention was not a neutral stance — rather, it was the only procedural option available, as the IMF framework does not permit formal “no” votes.

India used the opportunity to record a formal objection, raising multiple concerns:

• Terrorism Linkage: India stressed that international funds must not support nations that actively sponsor terrorism, warning of serious reputational and normative risks for the IMF.
• Track Record of Misuse: It pointed out that Pakistan has received IMF assistance in 28 of the past 35 years, including four bailout packages in the last five years, with no substantial or lasting reforms.
• Military Dominance in Economy: Citing a 2021 UN report, India underlined that Pakistan’s military controls the country’s largest conglomerates and now plays a central role in economic decision-making through the Special Investment Facilitation Council — raising red flags about transparency and reform credibility.

India also noted that several other IMF member countries expressed concerns over the effectiveness and purpose of continued IMF support to Pakistan. However, procedural constraints limited the IMF’s ability to act on those concerns meaningfully.

The Ministry of Finance said this situation reflects a broader systemic flaw in how global financial bodies account for moral and governance considerations. “There is an urgent need to ensure that value-based decision-making is integrated into the IMF’s procedural framework,” a senior Indian official stated.

The IMF Executive Board, comprising 25 Directors, represents all member countries, but voting power is weighted by economic size. While countries like the United States wield significant influence, most decisions are typically made by consensus. In cases where a formal vote is held, Directors may only vote in favour or abstain — not against — limiting dissent options for countries like India.

As India maintains heightened alert amid border tensions with Pakistan, this development reinforces New Delhi’s stance that global institutions must not turn a blind eye to state-sponsored terrorism under the guise of financial aid.