India Urges IMF to Rethink $7Bn Bailout to Pakistan After Pahalgam Attack

India has asked the International Monetary Fund (IMF) to review loans disbursed to Pakistan, news agency Reuters reported on Friday citing government sources. This follows the terrorist attack in Pahalgam which claimed 26 lives, mostly tourists. India identified two of the terrorists involved in the attack as Pakistanis.

Pakistan obtained a $7bn bailout from the IMF last year and received an additional $1.3bn loan in March aimed at boosting climate resilience. The support has been vital for Pakistan’s $350bn economy, which the country claims has stabilised under the programme, helping it avert a potential default. However, India has expressed concerns to the IMF regarding its financial support to Pakistan and has requested a review of these loans, said the report.

The Indian government holds Pakistan accountable for cross-border terrorism in Jammu and Kashmir's Pahalgam and also raised concerns with the IMF, which gives financial help to countries in need. However, Islamabad has denied its involvement in Pahalgam attack.

India on the other hand, put the Indus Waters Treaty of 1960 in abeyance for the first time. It also closed the Integrated Check Post (ICP) at Attari with immediate effect. The Attari border, located 28 kilometres from Amritsar in Punjab, is the only land route currently open for trade between India and Pakistan. Pakistan also suspended the Shimla agreement. Currently, both countries have also shut their airspace to each other’s airlines.

Pakistan Admits to Past Terror Ties

As tension between both nuclear-armed nations escalated and resurfaced, Pakistan admitted its past involvement in funding terror acts. Pakistan Peoples Party (PPP) chairman Bilawal Bhutto Zardari recently accepted that Pakistan made mistakes in the past by having ties with terrorist groups. However, he said, the country has now taken steps to correct those mistakes.

Last month, during an interview with Sky News, Pakistani Defence Minister Khawaja Asif also claimed that Pakistani have been doing this "dirty work" for the United States for about three decades and the West including Britain. "That was a mistake, and we suffered for that," he added.