India Seeks Wider Review of Loans to Pakistan

After a deadly attack in Indian-administered Kashmir that killed 26 people, India has formally requested the IMF and other multilateral agencies, including the World Bank and Asian Development Bank, to review and potentially reconsider key loans and grants to Pakistan—specifically a $7 billion IMF bailout and a $1.3 billion climate resilience loan. This move is part of India's broader diplomatic response, which also includes suspending the Indus Water Treaty and closing airspace between the two countries, increasing fears of conflict. Pakistan has denied involvement in the attack and called for a neutral investigation, while insisting that its IMF programme is progressing as planned and its $350 billion economy remains stable. The IMF Executive Board is scheduled to review Pakistan’s arrangements on May 9. India is actively urging other global lenders to reassess their financial support to Pakistan. The escalating dispute has prompted international concern and calls for restraint between the nuclear-armed neighbors.