Amid growing tensions between India and Pakistan following the Pahalgam terror attack, the Indian government has urged the International Monetary Fund to review loans disbursed to Pakistan, Reuters reported, citing government sources.
Notably, Pakistan has secured a $7 billion loan from IMF which was approved in September 2024 under the Extended Fund Facility (EFF). The fund will be released in instalments in 37 months. $2 billion of this loan has already been disbursed.
Moreover, an additional $1.3 billion climate resilience loan has also been granted to Pakistan by the IMF. This loan under the fund’s Resilience and Sustainability Trust is to be repaid in 28 months.
Other than the IMF, the Indian government is also going to urge other international funding agencies to review their funding to Pakistan, a government source reportedly said. Pakistan has secured finance from the World Bank and the Asian Development Bank (ADB).
Apart from seeking review of IMF loans, India will also seek to bring Pakistan back to the FATF grey list over its terror funding. Pakistan was put into the ‘grey list’ in June 2018, but the country was removed from the list in October 2022, citing improved measures. After removal from the list, Pakistan is no longer subject to enhanced surveillance for funding terrorism. Now India wants that back.
Indian government has already suspended the Indus Water Treaty, and has blocked the flow of several rivers to Pakistan after the terror attack. While a military operation is being considered at the highest level, the govt is also looking at other measures to put pressure on Pakistani govt to dismantle its terror network.
