Old habits die hard: This is the perfect saying for Pakistan, given its perpetual habit of borrowing funds from International Monetary Fund (IMF), even to simply sustain. The nation has an external debt of $131 billion.
As tensions continue to flare-up following the deadly April 22 Pahalgam terror attack, India is shifting gears: Wielding not just missiles and high-tech defence system, but its title of 'fastest growing economy' to corner Pakistan, which is sitting on the 91st position out of 133 economies, on the global stage.
The IMF meeting was held Friday to decide on fate of a flailing Pakistani economy under its $7 billion Extended Fund Facility (EFF). As the outcome is awaited India has abstained from IMF vote citing Pakistan’s risk of misusing funds for terrorism.
With Islamabad desperately seeking a $2 billion bailout from the International Monetary Fund (IMF), New Delhi has vowed to push back hard, using its position in the global economy and its influence at international forums to block the financial relief that Pakistan has historically relied upon.
Also Read: Can Pakistan fight India on borrowed money?
Pakistan’s Perpetual Borrowing: Another $2 billion in handouts?
As already said about Pakistan's old habits, it's not out of anywhere. The poor neighbour of India's has sought refuge under IMF for 24 times already and this time, too, it is trying to put itself on ventilator. In the last five years itself, Pakistan has received four grants from the top body.
According to ARY News, Pakistan will now receive a total of $2 billion from the IMF—$1.1 billion under the regular bailout and an additional $1.3 billion under the Resilience and Sustainability Facility (RSF). The latter is a climate-oriented fund, but now possibly being misused as a budgetary stopgap.
Also Read: Operation Sindoor Live Updates India Vs Pakistan War
The IMF and Pakistan had in July 2024 reached a deal for a $7-billion package under the extended fund facility. But this bailout came with its terms and conditions, as it should. The programme required Pakistan to put in place sound policies and reforms to strengthen macroeconomic stability, address deep structural challenges, and create conditions for a stronger, more inclusive, and resilient growth.
The $7 billion is being disbursed in tranches and the IMF board's nod is crucial for the release of the next tranche of $1 billion. Question is, has Pakistan been meeting these T&C?
Also Read: India may oppose $1.3 billion IMF loan to Pakistan
Maybe not because Pakistan's economy continues to face significant challenges despite recent improvements in some financial indicators. While inflation has seen a decline to 0.30% in April 2025, and the central bank reduced interest rates to 11% in a bid to stimulate growth, the country’s economic fundamentals remain weak.
The foreign exchange reserves, although higher at $15.58 billion as of May 2025, are still insufficient to cover long-term import needs, leaving the country vulnerable to external shocks. The economy is further burdened by persistent fiscal deficits, rising public debt, and a reliance on foreign aid and loans, mainly from the IMF, itself.
How is India planning to snatch Pakistan's lifeline?
India has taken a firm position ahead of the IMF Executive Board meeting. Foreign Secretary Vikram Misri confirmed that India’s representative will voice objections to further loans, citing Pakistan’s continued inaction on cross-border terrorism and economic mismanagement. "India will present its position strongly during the next IMF board meeting," Misri said.
"As a result of repeated bailouts, Pakistan’s debt burden is very high, which paradoxically makes it a too big to fail debtor for the IMF," India said in its statement to IMF.
"India pointed out that rewarding continued sponsorship of cross-border terrorism sends a dangerous
message to the global community, exposes funding agencies and donors to reputational risks, and
makes a mockery of global values. While the concern that fungible inflows from international
financial institutions, like IMF, could be misused for military and state sponsored cross border
terrorist purposes resonated with several member countries, the IMF response is circumscribed by
procedural and technical formalities," the statement further read.
However, after the terrorist attack claimed 26 lives, and a series of warnings to Pakistan against housing terrorists, India has now launched a full-spectrum economic pushback:
Trade Blockade: A 200% duty on Pakistani goods and suspended bilateral trade,including on fresh fruits, cement, petroleum products and mineral ore.
Although direct bilateral trade between India and Pakistan remains minimal, trade via third countries has grown significantly. Reports suggest that commodities such as dry fruits and chemicals, valued at $500 million, are now entering India through indirect routes. An official, as per TOI, has noted that a substantial portion of these exports, which were once directly shipped from Pakistan to India, is now being routed through alternative countries.
Treaty Suspension: India halted the Indus Waters Treaty, cutting into Pakistan’s water supply for agriculture from the western rivers, which makes 80% of its dependency.
Airspace Closure: Mutual restrictions on airline routes, escalating travel and logistics costs
Visa Freeze: Halting all new visas for Pakistani nationals
India’s cultural clampdown has also intensified in the form of soft blows to Pakistan:
With global focus currently drawn toward US-China tariff negotiations and aggressive diplomatic moves, India is exploiting this rare window to execute a long-term strategy, isolating Pakistan economically, diplomatically, and culturally.
Pakistan’s leadership has continued to present each IMF package as a diplomatic victory. However, the reality is stark. As noted by local media, Pakistan has become a perpetual borrower, incapable of weathering economic storms without running to external lenders.
The message from India is clear: military superiority is no longer its only edge. New Delhi is now deploying financial muscle to redraw the balance of power.
As tensions continue to flare-up following the deadly April 22 Pahalgam terror attack, India is shifting gears: Wielding not just missiles and high-tech defence system, but its title of 'fastest growing economy' to corner Pakistan, which is sitting on the 91st position out of 133 economies, on the global stage.
The IMF meeting was held Friday to decide on fate of a flailing Pakistani economy under its $7 billion Extended Fund Facility (EFF). As the outcome is awaited India has abstained from IMF vote citing Pakistan’s risk of misusing funds for terrorism.
With Islamabad desperately seeking a $2 billion bailout from the International Monetary Fund (IMF), New Delhi has vowed to push back hard, using its position in the global economy and its influence at international forums to block the financial relief that Pakistan has historically relied upon.
Also Read: Can Pakistan fight India on borrowed money?
Pakistan’s Perpetual Borrowing: Another $2 billion in handouts?
As already said about Pakistan's old habits, it's not out of anywhere. The poor neighbour of India's has sought refuge under IMF for 24 times already and this time, too, it is trying to put itself on ventilator. In the last five years itself, Pakistan has received four grants from the top body.
According to ARY News, Pakistan will now receive a total of $2 billion from the IMF—$1.1 billion under the regular bailout and an additional $1.3 billion under the Resilience and Sustainability Facility (RSF). The latter is a climate-oriented fund, but now possibly being misused as a budgetary stopgap.
Also Read: Operation Sindoor Live Updates India Vs Pakistan War
The IMF and Pakistan had in July 2024 reached a deal for a $7-billion package under the extended fund facility. But this bailout came with its terms and conditions, as it should. The programme required Pakistan to put in place sound policies and reforms to strengthen macroeconomic stability, address deep structural challenges, and create conditions for a stronger, more inclusive, and resilient growth.
The $7 billion is being disbursed in tranches and the IMF board's nod is crucial for the release of the next tranche of $1 billion. Question is, has Pakistan been meeting these T&C?
Also Read: India may oppose $1.3 billion IMF loan to Pakistan
Maybe not because Pakistan's economy continues to face significant challenges despite recent improvements in some financial indicators. While inflation has seen a decline to 0.30% in April 2025, and the central bank reduced interest rates to 11% in a bid to stimulate growth, the country’s economic fundamentals remain weak.
The foreign exchange reserves, although higher at $15.58 billion as of May 2025, are still insufficient to cover long-term import needs, leaving the country vulnerable to external shocks. The economy is further burdened by persistent fiscal deficits, rising public debt, and a reliance on foreign aid and loans, mainly from the IMF, itself.
How is India planning to snatch Pakistan's lifeline?
India has taken a firm position ahead of the IMF Executive Board meeting. Foreign Secretary Vikram Misri confirmed that India’s representative will voice objections to further loans, citing Pakistan’s continued inaction on cross-border terrorism and economic mismanagement. "India will present its position strongly during the next IMF board meeting," Misri said.
"As a result of repeated bailouts, Pakistan’s debt burden is very high, which paradoxically makes it a too big to fail debtor for the IMF," India said in its statement to IMF.
"India pointed out that rewarding continued sponsorship of cross-border terrorism sends a dangerous
message to the global community, exposes funding agencies and donors to reputational risks, and
makes a mockery of global values. While the concern that fungible inflows from international
financial institutions, like IMF, could be misused for military and state sponsored cross border
terrorist purposes resonated with several member countries, the IMF response is circumscribed by
procedural and technical formalities," the statement further read.
However, after the terrorist attack claimed 26 lives, and a series of warnings to Pakistan against housing terrorists, India has now launched a full-spectrum economic pushback:
Trade Blockade: A 200% duty on Pakistani goods and suspended bilateral trade,including on fresh fruits, cement, petroleum products and mineral ore.
Although direct bilateral trade between India and Pakistan remains minimal, trade via third countries has grown significantly. Reports suggest that commodities such as dry fruits and chemicals, valued at $500 million, are now entering India through indirect routes. An official, as per TOI, has noted that a substantial portion of these exports, which were once directly shipped from Pakistan to India, is now being routed through alternative countries.
Treaty Suspension: India halted the Indus Waters Treaty, cutting into Pakistan’s water supply for agriculture from the western rivers, which makes 80% of its dependency.
Airspace Closure: Mutual restrictions on airline routes, escalating travel and logistics costs
Visa Freeze: Halting all new visas for Pakistani nationals
India’s cultural clampdown has also intensified in the form of soft blows to Pakistan:
- Pakistani actors and musicians are banned from Indian media
- YouTube and Instagram accounts of Pakistani artists like Mahira Khan and Atif Aslam are now restricted within India
- Pakistani content has vanished from Indian screens—TV, music apps, and streaming platforms alike
With global focus currently drawn toward US-China tariff negotiations and aggressive diplomatic moves, India is exploiting this rare window to execute a long-term strategy, isolating Pakistan economically, diplomatically, and culturally.
Pakistan’s leadership has continued to present each IMF package as a diplomatic victory. However, the reality is stark. As noted by local media, Pakistan has become a perpetual borrower, incapable of weathering economic storms without running to external lenders.
The message from India is clear: military superiority is no longer its only edge. New Delhi is now deploying financial muscle to redraw the balance of power.
You may also like
Railways Run Special Trains from Jammu, Udhampur After Airport Closures; Vande Bharat Deployed for IPL Team
MP's tribal arts earn recognition globally, says CM Yadav
Diabetes and insulin resistance risk cut down by daily cups of one drink, study finds
'Don't hit morale': Not the time to release SSC officers, SC tells Army
Weight loss drugs could 'revolutionise' treatment for alcohol abuse
