India's likely caution to IMF on Pakistan's bailout package: A call for careful consideration.
  • 667 views
  • 2 min read

India has urged the International Monetary Fund (IMF) to exercise caution while considering a bailout package for Pakistan, raising concerns about the country's track record and potential misuse of funds. This comes as the IMF board is scheduled to review Pakistan's financial situation and its eligibility for further financial assistance.

India's Concerns

India's Foreign Secretary Vikram Misri stated that Pakistan's case is "self-evident to those people who generally open their pockets to bail out this country". He expressed skepticism about the success of previous loan programs extended to Pakistan. India's executive director at the IMF will formally present India's position to the board, which includes a review of loans extended to Pakistan.

Misri also criticized Pakistan's use of IMF funds, alleging that the financial support indirectly enables Pakistan to fund its military-intelligence operations, including groups such as Lashkar-e-Taiba (LeT) and Jaish-e-Mohammed (JeM). He alluded to Pakistan's reputation as the "epicenter of global terrorism" and pointed to the presence of UN-sanctioned terrorists operating within Pakistan's borders.

India's concerns are mounting due to the belief that financial support to Pakistan might be used to fuel cross-border terrorism activities, particularly against India. These concerns have been amplified after the recent terror attack in Pahalgam.

India's Actions

India is actively working to diplomatically and economically isolate Pakistan. This includes urging the Asian Development Bank (ADB) to suspend all funding to Islamabad. India is also engaging with other European nations to push for stricter oversight on international funding to Pakistan.

Pakistan's Perspective

Pakistani officials have stated that the country's $7 billion IMF bailout, secured last year, remains "well on track" and is critical for macroeconomic stability. They also received an additional $1.3 billion in climate resilience funding in March 2025. An advisor to Pakistan's Finance Ministry has said that the IMF program is not just stabilizing Pakistan but also building confidence.

IMF's Stance

IMF loans typically come with strict conditionalities, requiring recipient countries, including Pakistan, to implement structural economic reforms. The IMF board will assess Pakistan's financial assistance package during its meeting. The IMF's review will determine whether Pakistan meets the necessary conditions to unlock the next tranche of funding.

Geopolitical Implications

Escalating tensions between India and Pakistan could jeopardize Pakistan's macroeconomic stability and access to crucial external financing. Moody's has cautioned that further escalation in tensions with India could hamper Pakistan's economic growth and delay its fiscal consolidation efforts, undermining the country's progress toward macroeconomic stability.

Historical Context

Pakistan has received several bailout packages from the IMF over the past decade. For example, it was granted a $6 billion loan in 2019. In September 2024, the Fund approved a $7 billion package, of which $1 billion has been disbursed. In March 2025, the IMF also approved a $1.3 billion loan linked to climate change-related initiatives.

India had cautioned the IMF about a fresh bailout for Pakistan in 2019, when Pakistan was under the Financial Action Task Force's (FATF) scanner for failing to crack down on terror funding. Indian officials warned of possible embarrassment for the IMF, pointing out that Pakistan was already "grey listed" and faced a high probability of being in the "black list," which would severely restrict its financial transactions with other nations.


Writer - Diya Menon
Diya Menon is an enthusiastic journalist, eager to contribute fresh perspectives to the evolving media landscape, driven by a passion for sports. With a recent degree in communication studies, Diya is particularly interested in social trends and compelling human-interest stories within her community. She's dedicated to delivering well-researched and engaging content, aiming to uncover and share narratives that resonate deeply with the local population, while also actively following the latest in sports.
Advertisement

Latest Post


Entertainment  |  Aug 18, 2025
Following the gunfire incident at his Gurugram residence early Sunday morning, August 17, 2025, YouTuber and Bigg Boss OTT winner Elvish Yadav has confirmed the safety of his family and himself. The incident, which involved multiple shots fired at hi...

Entertainment  |  Aug 18, 2025
Shraddha Arya, the popular television actress best known for her role as Preeta in *Kundali Bhagya*, celebrated her 38th birthday on August 17, 2025. This year's celebration was particularly special as it marked her first birthday as a mother to her ...

World  |  Aug 18, 2025
The trailer launch of Vivek Agnihotri's upcoming film, "The Bengal Files," in Kolkata has ignited a significant controversy, with the director himself alleging attempts to stifle the film's release due to political motivations. The film delves into t...

Business  |  Aug 18, 2025
As an NRI, you might be wondering about your tax obligations on capital gains from Indian mutual funds. The answer isn't always straightforward, as it depends on several factors, including the type of mutual fund, the holding period, and the country ...

Advertisement
Entertainment  |  Aug 18, 2025
The highly anticipated first song, "Guzaara," from the upcoming action thriller *Baaghi 4*, was released on August 18, 2025. The song features Tiger Shroff and Harnaaz Sandhu, marking their first on-screen pairing, and is expected to showcase their c...

Sports  |  Aug 18, 2025
Sania Mirza, born on November 15, 1986, in Mumbai, has etched her name in the annals of Indian tennis as one of the most successful and influential athletes the country has ever produced. Her journey from a young girl with a racquet to a former world...

Entertainment  |  Aug 18, 2025
Justin Bieber's recent Instagram post featuring Kendall Jenner has ignited a flurry of reactions online, showcasing the enduring friendship between the trio of Justin, his wife Hailey Bieber, and Kendall. The photograph, seemingly capturing a candid ...

Business  |  Aug 18, 2025
Nikhil Kamath, co-founder of Zerodha, has made a significant investment of ₹137. 5 crore in Goldi Solar, one of India's largest solar photovoltaic (PV) module manufacturers. This investment underscores Kamath's confidence in the renewable energy secto...

Advertisement
About   •   Terms   •   Privacy
© 2025 DailyDigest360