New Delhi [India]: India has strongly opposed the allocation of international financial aid to a country that, it says, continues to sponsor cross-border terrorism. During the International Monetary Fund’s (IMF) recent review of a USD 1 billion Extended Fund Facility (EFF) and the consideration of a new USD 1.3 billion Resilience and Sustainability Facility (RSF) for Pakistan, Indian government sources revealed that New Delhi issued a formal objection, citing reputational risks for global institutions and a breach of international norms.
Though India abstained from voting on the loan proposal, sources clarified that this was not due to neutrality. “IMF rules do not permit a formal ‘no’ vote,” they said. Despite this procedural constraint, India made its strong dissent known by formally recording its objections.
Among India’s key points of concern were Pakistan’s ongoing pattern of receiving IMF support without delivering on structural reforms. “Pakistan has received IMF assistance in 28 of the past 35 years, including four separate programs in just the last five years, with no meaningful or lasting change,” officials noted.
India also raised serious concerns about governance issues in Pakistan, specifically pointing to the entrenched role of the military in the nation’s economy.
“Pakistan military’s deeply entrenched interference in economic affairs poses significant risks of policy slippages and reversal of reforms,” India’s statement said. It referenced a 2021 UN report that described military-run businesses as the “largest conglomerate in Pakistan,” and highlighted the military’s central role in the country’s Special Investment Facilitation Council.
In its official submission to the IMF, India flagged the risk that international aid could be misused, stating it could end up supporting “state-sponsored cross-border terrorism.”
The Indian Ministry further pointed out that other member countries shared similar apprehensions. However, they said that procedural limitations within the IMF prevent stronger responses.
“The IMF response is circumscribed by procedural and technical formalities,” the Ministry stated, adding that this represents “a serious gap highlighting the urgent need to ensure that moral values are given appropriate consideration in the procedures followed by global financial institutions.”
The IMF’s Executive Board, which includes 25 Directors representing member countries or coalitions, is responsible for decisions on loan approvals. Unlike the United Nations’ one-country-one-vote system, the IMF operates on a weighted voting structure based on the economic size of each member. This often means countries like the United States hold significant sway, and decisions are typically reached through consensus.
As the current voting framework does not permit members to cast a formal “no” vote, India’s abstention served as a procedural expression of its disapproval.