India has formally requested the International Monetary Fund to re-examine its financial assistance to Pakistan, according to a senior government official speaking to Reuters. The move comes as relations between the two nuclear-armed neighbours deteriorate following a deadly assault on Hindu pilgrims in Kashmir that left 26 people dead.
New Delhi has blamed the attack on three individuals, two of whom it claims are Pakistani nationals, labelling them “terrorists.” Pakistan has rejected any involvement and is calling for an impartial inquiry into the incident.
In response to the escalating crisis, India has suspended a longstanding river water-sharing agreement with Pakistan. Both countries have also blocked access to their airspace for each other’s airlines, further straining ties.
Pakistan, which secured a $7 billion bailout from the IMF last year, received an additional $1.3 billion in climate-related funding in March. The support is seen as crucial for the country’s $350 billion economy, which Islamabad says has stabilised under the programme and narrowly avoided a default.
India has now voiced concerns to the IMF over the disbursal of these funds, seeking a formal reassessment. Neither the IMF nor India’s finance ministry has issued an official statement on the matter.