NEW DELHI: India is preparing to launch a diplomatic offensive against Pakistan, which it accuses of supporting cross-border terrorism. As part of this effort, New Delhi is set to urge global financial institutions—including the International Monetary Fund (IMF), World Bank, and Asian Development Bank—to reassess funding and loan assistance provided to Islamabad.
According to government sources, India will specifically seek a review of the financial support extended to Pakistan by the IMF in recent months, including the $7 billion bailout package secured last year and a $1.3 billion climate resilience loan granted in March. The goal is to pressure Pakistan by targeting its fragile economy and limiting its access to international funding.
India also intends to press the Financial Action Task Force (FATF), the global anti-money laundering watchdog, to re-list Pakistan on the “grey list” due to its alleged continued harboring of terrorist elements.
“Choking financial lifelines to Pakistan would severely weaken its already struggling economy,” said a senior official. “We are in touch with key multilateral agencies, including the World Bank and ADB, that have ongoing projects in Pakistan.”
The IMF executive board is scheduled to meet Pakistani officials on May 9 to conduct the first review of its Extended Fund Facility and to consider Islamabad’s request for further funding under the Resilience and Sustainability Facility.
A policy brief by Soumya Bhowmick from the Observer Research Foundation (ORF) argued that, in light of the April 22 terrorist attack in Pahalgam—the deadliest assault on Indian civilians since the 2008 Mumbai attacks—the IMF must re-evaluate its approach.
“The IMF must reassess its engagement with Pakistan… Continued financial assistance without stringent conditions addressing its support for terrorism risks undermining the core goals of economic reform and regional security. Counter-terrorism safeguards and accountability must be built into future IMF programs,” Bhowmick noted.
In January 2025, the World Bank approved a $20 billion assistance package for Pakistan to help it navigate economic and developmental challenges—a move India is also expected to contest in upcoming diplomatic engagements.
