India Cuts IMF Director’s Term Before Crucial Loan Review for Pakistan

In a surprising move, the Indian government has dismissed Dr. Krishnamurthy Subramaniam, its Executive Director at the International Monetary Fund (IMF), six months ahead of his scheduled departure. Dr. Subramaniam’s termination, effective April 30, 2025, comes with no official explanation, sparking speculation about the timing of the decision.

This development coincides with a key IMF board meeting to review a proposed $1.3 billion climate resilience loan for Pakistan, scheduled for May 9, 2025. According to reports from The Times of India, this action was taken just days before the meeting, raising questions about its connection to the ongoing tensions between India and Pakistan.

A government statement confirmed that the Appointment Committee of the Cabinet (ACC), led by Prime Minister Narendra Modi, approved the immediate removal of the IMF Executive Director. Dr. Subramaniam had assumed his IMF role in November 2022, representing India, Bangladesh, Sri Lanka, and Bhutan. His term was initially set to run through November 2025.

Sources suggest that Dr. Subramaniam had previously raised concerns about the IMF’s data accuracy, a position that reportedly clashed with the multilateral agency’s interests. The IMF had shown dissatisfaction with some of his remarks, particularly regarding India’s debt.

In the wake of Dr. Subramaniam’s departure, Indian news agency PTI reported that Parameswaran Iyer, currently an Executive Director at the World Bank, has been temporarily appointed to take over India’s seat on the IMF board ahead of the upcoming meeting.

India shares a four-country constituency at the IMF with Bangladesh, Sri Lanka, and Bhutan. The country had also requested the IMF to reconsider Pakistan’s loan arrangements, particularly in light of increasing geopolitical tensions after a deadly attack in occupied Kashmir. However, the IMF has reaffirmed its commitment to proceeding with the review of Pakistan’s loan program, including the $7 billion Stand-By Arrangement (SBA) and the climate resilience loan.

The IMF’s Executive Board is set to meet on May 9 to assess Pakistan’s performance under the existing loan program.