The International Monetary Fund (IMF) has approved the disbursement of around $1 billion to Pakistan under its Extended Fund Facility (EFF), marking the completion of the first review of Islamabad’s economic reform programme. The announcement, made on May 8, came with the IMF’s praise for “strong programme implementation” and signs of “continuing economic recovery”.
But back in New Delhi, eyebrows were raised.
India, although present during the IMF vote, chose to abstain. Not because it was unsure, but because it couldn’t actually vote “no”. That’s not how the IMF works.
Unlike the United Nations where every country has an equal say, the IMF runs on economic weight. Countries like the US have a much bigger share of the vote, while others, including India, operate within their quota.
What’s more, the IMF doesn’t allow member nations to vote against a proposal — they can either support it or abstain. So India opted for the latter.
India’s reasons go far beyond economic scepticism. Officials argue that supporting a country “that sponsors cross-border terrorism” is risky business for the IMF. According to Indian government sources, such funding carries reputational risks and might even weaken the credibility of global financial systems.
India didn’t stop at abstaining. It made its objections part of the official record, voicing concerns about both the effectiveness of repeated IMF loans and the questionable role of the Pakistani military in economic decisions.
The military, New Delhi noted, continues to dominate financial matters and investment channels — a fact that, in India’s view, undermines any real reform on the ground.
India also pointed to Pakistan’s long-standing history with IMF loans — 28 bailout programmes over the last 35 years, including four in the past five years. Yet, according to India, not much seems to have changed structurally. Pakistan’s economic system, it argued, remains unstable, with deep military involvement and little civilian oversight.
One UN report from 2021 even called military-linked businesses the “largest conglomerate in Pakistan”. Today, Pakistan’s army reportedly holds a leading position in its new Special Investment Facilitation Council, further blurring the lines between economic policy and military power.
In addition to the $1 billion EFF review, the IMF also looked into a fresh $1.3 billion under its Resilience and Sustainability Facility (RSF) — a fund aimed at supporting climate-resilient projects. While no final decision has been announced yet on the RSF, India’s concerns remain the same: where’s the money really going?
Sources say India fears these funds could be diverted or misused, particularly given Pakistan’s internal governance issues and military control over economic levers.
India wasn’t alone in its concerns. Several other countries reportedly shared similar doubts. But again, the IMF’s structure doesn’t leave much room for moral or political objections — decisions are based on economic indicators, technical evaluations, and programme performance.
The Indian side described this limitation as a “serious gap” in the IMF’s procedures, arguing that “moral values” must play a greater role in such global financial decisions.
