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India welcomes stricter IMF terms for Pakistan but questions bailout timing
India has said it is 'thankful' for the 11 additional conditions imposed by the International Monetary Fund (IMF) on Pakistan, while clarifying that it is not opposed to financial assistance meant for genuine developmental purposes. read more
India has said it is 'thankful' for the 11 additional conditions imposed by the International Monetary Fund (IMF) on Pakistan, while also raising alarm over the timing of the recent bailout, citing concerns that the funds may be indirectly supporting Pakistan's expanding defence expenditure.
Quoting public data, official sources told reporters that Pakistan allocates around 18% of its general budget to defence affairs and services, significantly higher than the 10–14% typically spent by other conflict-affected nations.
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They further noted that Pakistan's arms imports increased dramatically from 1980 to 2023, by more than 20% during the years it received IMF disbursements compared to non-disbursement years.
'We are thankful for the additional 11 conditions imposed by the IMF on Pakistan. However, we are not against any financial assistance provided for genuine developmental agendas,' a source said, reiterating India's concerns about potential misuse of global financial assistance.
Indian multi-party delegations are currently touring several countries to expose what they describe as Pakistan's continued support for terrorism and to underline India's zero-tolerance stance.
According to Pakistan-based Express Tribune, the IMF has tied the next tranche of its bailout package to several fiscal and governance reforms. These include passing a Rs 17.6 trillion budget for FY2025-26 aligned with IMF goals, introducing new agriculture income tax laws with systems for registration and compliance by June 2025, and publishing a governance action plan based on the IMF's own diagnostic.
Pakistan is also expected to prepare and publish a post-2027 financial sector strategy to outline institutional and regulatory priorities beyond the current programme.
On May 9, the IMF completed its review of a USD 1 billion Extended Fund Facility (EFF) and approved an additional USD 1.3 billion under the Resilience and Sustainability Facility (RSF), taking total disbursements under the USD 7 billion programme to USD 2 billion.
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The IMF staff report warned that escalating tensions between India and Pakistan could pose risks to the programme's fiscal and reform objectives, further highlighting the fragility of the current economic situation.
With inputs from agencies
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