IMF Approves $1 Billion Bailout for Pakistan Despite India's Concerns

IMF's Support for Pakistan Amidst Tensions

In a recent development, the International Monetary Fund (IMF) has confirmed that Pakistan has fulfilled all necessary criteria to receive a new loan installment, despite objections raised by India. The IMF has approved a bailout package worth $1 billion (over ₹8,000 crore) for the financially struggling nation.

This financial assistance arrives at a time when Pakistan is responding to India's Operation Sindoor, a military initiative targeting terrorist infrastructure within its borders and in Pakistan-Occupied Kashmir (PoK).

India has urged the IMF to reconsider its support, citing concerns that Pakistan permits terrorist activities from its territory against Indian citizens.

Defence Minister Rajnath Singh recently remarked that providing aid to Pakistan equates to indirectly funding terrorism, urging international organizations, including the IMF, to take heed.

The IMF had previously disbursed $2.1 billion to Pakistan in two installments as part of its Extended Fund Facility (EFF) program, which was established last year with a total agreement of $7 billion.

Julie Kozack, the IMF's communications director, defended the loan approval, stating that the Board recognized Pakistan's progress in meeting the required targets and reforms, which justified the decision to proceed with the funding.

Kozack also addressed the ongoing conflict between India and Pakistan, expressing condolences for the loss of life and advocating for a peaceful resolution. She noted that the IMF's Executive Board had approved Pakistan's EFF program in September 2024, with the first review scheduled for early 2025. The recent agreement reached on March 25, 2025, led to the disbursement following the Board's review on May 9.

She emphasized that the IMF conducts regular assessments of lending programs to ensure compliance with established conditions, warning that any deviation could affect future reviews for Pakistan.