India Requests IMF Review of Loans to Pakistan Following Pahalgam Terror Attack

India has formally requested the International Monetary Fund (IMF) to reassess its financial assistance to Pakistan, following a deadly terror attack on tourists in Pahalgam, Jammu and Kashmir. The attack, which resulted in the deaths of 25 tourists and one local, has further strained the already fragile relationship between the two nations.

The Indian government believes Pakistan needs to be held accountable and has raised its concerns with the IMF (Photo: X @dailystar)

Background of the Pahalgam Attack and Escalating Tensions

The Indian government has raised concerns with the IMF, urging accountability for Pakistan, given its perceived role in supporting terrorism. Officials claim that two of the terrorists responsible for the attack were identified as being from Pakistan. In response, Pakistan has denied involvement, calling for a neutral investigation into the incident. This deadly attack has exacerbated tensions between India and Pakistan, both of which are nuclear-armed neighbors, raising fears of a potential military conflict.

In retaliation, India has halted its participation in the Indus Waters Treaty (1960) and suspended the Shimla Agreement (1972). Both countries have also shut down their respective airspaces to each other's airlines, further intensifying the diplomatic rift.

Pakistan’s IMF Dependence and Financial Aid

Pakistan’s economy, valued at $350 billion, has heavily relied on IMF loans. Last year, the IMF provided a $7 billion bailout, and in March, a new $1.3 billion loan was granted to assist with the country’s climate challenges. These loans have been crucial for Pakistan in avoiding a financial crisis. In light of the recent events, India has expressed concern over these loans, prompting the request for a review by the IMF.

Pakistan Acknowledges Past Support for Terror Groups

Meanwhile, Pakistan has admitted its past involvement in supporting terror groups from its soil. Pakistan Peoples Party (PPP) Chairman Bilawal Bhutto Zardari acknowledged the country's past mistakes, stating that Pakistan had learned from its history and taken steps to address the issue. In a recent interview with Sky News, Bilawal explained, “It is not a secret that Pakistan has a past... We have gone through wave after wave of extremism... but we have gone through internal reforms to address this problem.”

Defence Minister Khawaja Asif echoed these sentiments in a separate interview, emphasizing that Pakistan’s past actions, including its support for terror groups, were mistakes made during its cooperation with the United States and the West. Both leaders have emphasized that this chapter belongs to the past, with Pakistan no longer participating in such activities.

Conclusion

The request from India to the IMF to review its financial aid to Pakistan highlights the growing tensions in the region, exacerbated by recent terror attacks and historical grievances. While Pakistan acknowledges its past involvement in supporting terrorist activities, the ongoing diplomatic crisis has far-reaching consequences, affecting not only the relationship between India and Pakistan but also the region's geopolitical stability.