IMF Defends Pakistan Loan Approval Amid India’s Objections

The International Monetary Fund (IMF) has defended its recent $1 billion loan disbursement to Pakistan, asserting that the decision was based strictly on economic assessments and Pakistan’s compliance with reform conditions — a move that comes amid vocal opposition from India following its counter-terror operation, Operation Sindoor.

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IMF Communications Director Julie Kozack addressed the controversy, stating that the Fund's Executive Board approved the disbursement on May 9 after confirming Pakistan had “met all of the targets” under the Extended Fund Facility (EFF). “Pakistan had made progress on reforms,” she said, emphasizing that the Fund’s review process follows standard protocol focused on technical and fiscal benchmarks.

Kozack also confirmed that a Staff-Level Agreement was reached with Pakistani authorities on March 25 and later ratified by the Board. She acknowledged the regional tensions and offered condolences for recent casualties, calling on all parties to seek peaceful resolution. However, she reiterated that the IMF’s role is limited to economic matters and does not extend to geopolitical concerns.

The $1 billion is part of a larger $7 billion EFF programme signed last year. This latest tranche brings Pakistan’s total received under the facility to $2.1 billion.

The decision has drawn sharp criticism from India, which urged the IMF to reassess the bailout in light of Pakistan’s alleged role in sponsoring cross-border terrorism. Following Operation Sindoor, which targeted terror camps in Pakistan and Pakistan-occupied Kashmir (PoK), Indian officials, including Defence Minister Rajnath Singh, described the aid as “indirect funding to terror.”

India has maintained that Pakistan continues to allow its territory to be used for attacks targeting Indian civilians, and has raised concerns about global financial institutions inadvertently enabling such activities by providing unrestricted aid.

Despite India's objections, the IMF has stood by its assessment process, signaling that while it acknowledges the geopolitical backdrop, its decisions are guided by economic criteria and program compliance.