India Urges IMF to Rethink $1bn Loan to Pakistan

Indian Defence Minister Rajnath Singh on Friday urged the International Monetary Fund (IMF) to reconsider a recently approved $1 billion loan to Pakistan, accusing Islamabad of diverting funds toward militant activities—an allegation strongly rejected by Pakistan as “a sign of desperation.”

The remarks come amid a sharp escalation in tensions between the two nuclear-armed neighbours, following the deadliest bout of military violence in decades. The crisis was triggered by a deadly attack on tourists in Indian-administered Kashmir last month, which New Delhi claims was orchestrated with Pakistani support. Islamabad has denied any involvement.

Speaking to troops at an air force base in western India, Singh said, “I believe a big portion of the $1 billion coming from IMF will be used for funding terror infrastructure. Any economic assistance to Pakistan is nothing less than funding terror.”

Despite Indian opposition, the IMF’s Executive Board last week approved its loan programme review, resulting in a $1 billion disbursement already received by Pakistan’s central bank. In addition, a separate $1.4 billion loan was approved under the IMF’s climate resilience initiative.

Islamabad dismissed Singh’s statement as politically motivated and said the funds are directed toward stabilising the country’s economy and climate resilience efforts, not military or extremist activity.