India Abstains from IMF Vote on Pakistan Loan, Flags Terrorism Risk and Military Interference
New Delhi, May 9, 2025 — India abstained from a crucial International Monetary Fund (IMF) vote on a proposed bailout package for Pakistan, strongly signaling its opposition to continued financial support without accountability. The IMF Executive Board was reviewing Pakistan’s request for a $1 billion disbursement under the Extended Fund Facility (EFF) and a fresh $1.3 billion loan under the Resilience and Sustainability Facility (RSF).
India cited a litany of reasons for its abstention, including Pakistan’s chronic misuse of IMF programs, military domination of its economy, poor implementation track record, and the risk of funds being diverted to support cross-border terrorism. Notably, IMF rules prevent countries from voting “no,” making abstention the only way to express formal dissent.
India Cites History of Failure and Terror Links
India raised strong objections, stating that Pakistan has failed to implement structural reforms despite receiving IMF aid nearly continuously. “In the 35 years since 1989, Pakistan has received IMF disbursements in 28 years,” India noted. “There have been four IMF programs since 2019 alone. If the previous programs were successful, there would be no need for another bailout.”
Indian representatives argued that this persistent borrowing indicates either flawed IMF program design or Pakistan’s non-compliance with reform conditions.
Furthermore, India raised concerns about potential misuse of IMF funds to finance state-sponsored terrorism. “Fungible inflows from institutions like the IMF could be misused for military and cross-border terrorist activities,” India warned, adding that the possibility resonated with several member nations.
Military Control and Economic Risks
India also pointed to the Pakistan Army’s deep economic involvement, despite the presence of a civilian government. Citing a 2021 UN report, India reminded the IMF that the military remains the largest business conglomerate in Pakistan and plays a central role in the Special Investment Facilitation Council.
Such dominance, India argued, increases the risk of policy slippage and reform reversals. “The outsized role of the Pakistan Army in political and economic decisions severely undermines the credibility of reform efforts,” India stated.
Moral Responsibility and Global Risk
India expressed that continued support without accountability damages the moral foundation of global financial institutions. “Rewarding a country that sponsors terrorism sends a dangerous signal to the world,” the statement read, emphasizing reputational risks for funding agencies and donors.
India also highlighted the IMF’s own evaluation of Pakistan’s prolonged use of its resources, noting that “political considerations appear to influence IMF lending decisions.”
IMF Acknowledges India’s Dissent
Though India’s vote was recorded as an abstention due to IMF procedures, its objections were noted in the official proceedings. The IMF typically operates on a consensus basis, and abstentions serve as a diplomatic tool to formally register disagreement.
India’s move comes amid heightened national sentiment against cross-border threats, with top industrialist Mukesh Ambani recently praising the Indian Armed Forces for Operation Sindoor and backing Prime Minister Narendra Modi’s firm stance against terrorism.
