India has abstained from voting on the International Monetary Fund’s (IMF) review of Pakistan’s $1 billion Extended Fund Facility and the proposed $1.3 billion Resilience and Sustainability Facility. The decision stems from India’s deep-rooted concerns about Pakistan’s track record with IMF loans and the possibility of misused funds supporting cross-border terrorism.

In a strong statement, the Indian Ministry of Finance questioned the credibility and success of past IMF interventions in Pakistan. It argued that if earlier bailout packages had worked, Pakistan would not have returned seeking further assistance. India warned that repeated funding without accountability risks enabling terrorism, undermining the IMF’s integrity.

New Delhi’s concerns weren’t limited to economic management. It pointed fingers at the Pakistani military’s influence in civilian economic affairs, calling it a major threat to fiscal reforms and policy stability. Citing a 2021 UN report, India emphasized that Pakistan’s military runs the country’s largest business networks and dominates investment councils.

Of particular concern was the fear that IMF resources could be indirectly aiding state-sponsored terrorism. India warned that this undermines the values of international governance and exposes financial institutions to serious reputational risks.

India also highlighted that while some IMF members shared these anxieties, the Fund’s response remained confined to procedural formalities. This, India asserted, reflects a troubling gap and a pressing need to align financial decisions with ethical principles.