India Urges IMF to Reassess Loans to Pakistan: Sources

NEW DELHI (Web Desk) — India has urged the International Monetary Fund (IMF) to review financial assistance provided to Pakistan, an Indian government source told Reuters on Friday, as tensions between the neighboring South Asian nations intensify following a deadly terrorist attack in Indian-administered Kashmir.

The diplomatic fallout comes after 26 Indian tourists were killed in an attack last week. India has blamed the assault on three militants, including two Pakistani nationals, whom it labeled as “terrorists.” Pakistan, however, has denied any involvement and called for an independent investigation.

In response to the attack, both countries have taken a series of retaliatory steps. India has suspended a key water-sharing treaty, while both nations have closed their airspace to each other’s airlines — escalating fears that the standoff could spiral into a military confrontation between the two nuclear-armed rivals.

Amid the tensions, India has raised concerns with the IMF about its financial support to Pakistan, including a $7 billion bailout granted last year and an additional $1.3 billion climate resilience loan approved in March. These funds are vital to Pakistan’s $350 billion economy, which has seen signs of stabilization under the IMF program.

The IMF and India’s finance ministry did not immediately comment on the development.

Pakistan, for its part, maintains that the IMF program remains on track. Khurram Schehzad, an advisor to Pakistan’s finance minister, told Reuters that the country’s latest review with the IMF was positive and that meetings held during the recent spring sessions in Washington were productive.

“We had about 70 meetings — the interest in supporting and investing in Pakistan is very strong as the economy begins to recover,” Schehzad said.

The growing tensions have sparked international concern. U.S. Vice President JD Vance on Thursday urged Pakistan to cooperate with India in pursuing those responsible for the attack, emphasizing the need for de-escalation.