Pahalgam attack fallout: India plans drive to starve Pakistan of funds from global agencies

NEW DELHI: India is looking to mount a global offensive against Pakistan, which it has accused of backing terrorists.New Delhi is set to ask multilateral agencies, including the International Monetary Fund, to have a relook at funds and loans provided to Pakistan, while urging the Financial Action Task Force, the global anti-money laundering agency, to put Islamabad on the grey list.

A govt source said India would seek a review of the facilities extended by IMF to Pakistan in recent months to help it avoid bankruptcy and is also in contact with other agencies such as World Bank and Asian Development Bank that is financing projects.
Choking of funding to Pakistan will deal a major blow to the fragile economy. Pakistan had managed to secure a $7 billion bailout programme from the IMF last year and was granted a new $1.3 billion climate resilience loan in March.

The IMF executive board is scheduled to meet Pakistani officials on May 9 for first review of the extended funding facility, and request for an arrangement under the resilience and sustainability facility.
"IMF must reassess its engagement with Pakistan in light of the April 22 Pahalgam attack, the deadliest one on Indian civilians since the 2008 Mumbai attacks... For IMF, continued financial assistance without stringent conditionalities addressing Pakistan's support for terrorism risks undermining the very objectives of economic stability and reform. Integrating counter-terrorism measures and accountability mechanisms into IMF programmes is imperative to ensure that financial aid does not inadvertently subsidise activities that threaten regional and global security," a paper by ORF's Soumya Bhowmick said.
In Jan 2025, the World Bank had approved a $20 billion lending package to Pakistan for the cash-strapped country to overcome its challenges.
Also read: Pahalgam fallout: Fearing India hit, Pakistan empties out terror lanch pads off LoC