May 9, 2025: India has abstained from a key International Monetary Fund (IMF) vote concerning a USD 1 billion review under Pakistan’s Extended Fund Facility (EFF) and a proposed USD 1.3 billion Resilience and Sustainability Facility (RSF), citing serious concerns over terrorism and financial misuse.
In a statement released by the Ministry of Finance, India expressed deep skepticism about Pakistan’s commitment to reform and questioned the effectiveness of repeated IMF bailouts, particularly in light of the country’s history of alleged state-sponsored cross-border terrorism.
“Had previous programs succeeded in stabilizing Pakistan’s macro-economic environment, the country would not have returned to the IMF for another bailout,” the statement noted, pointing out that Pakistan has been a prolonged IMF borrower—receiving disbursements in 28 of the last 35 years, and initiating four different programs in just the past five.
The Ministry further criticized the entrenched role of Pakistan’s military in economic decision-making. Referring to a 2021 UN report, the statement said military-linked businesses function as Pakistan’s largest conglomerate and continue to dominate institutions like the Special Investment Facilitation Council, raising fears of reform reversals and policy instability.
A key point of contention was the potential diversion of IMF funds toward terrorism. “Rewarding continued sponsorship of cross-border terrorism sends a dangerous message, risks the credibility of funding agencies, and undermines global moral values,” the Indian statement said.
India added that several other IMF member countries shared these concerns, although the IMF, bound by procedural frameworks, proceeded with its review while merely “taking note” of India’s abstention.
The development unfolds amid continued tensions between India and Pakistan, with New Delhi accusing Islamabad of harboring and supporting militant activities—allegations Pakistan has consistently denied.
Despite objections, Pakistan’s pressing economic crisis, marked by soaring inflation, dwindling foreign reserves, and mounting debt, makes international financial assistance crucial. Yet, India’s stance underscores a growing call for greater accountability and value-based oversight in global financial governance.