Winning Bizness Desk
Mumbai.In the wake of the April 22 terror attack in Pahalgam, India has intensified its diplomatic efforts to block international funding to Pakistan. Finance Minister Nirmala Sitharaman met with Asian Development Bank (ADB) Director Masatsugu Asakawa and urged a reduction in economic assistance to Pakistan. The move is part of India’s broader strategy to counter terror funding originating from its neighbour. She also held discussions with Italian Finance Minister Giancarlo Giorgetti on curbing financial support to Pakistan.
India Engages Global Partners to Re-List Pakistan in FATF Grey List
India is working closely with European nations to push for Pakistan’s re-inclusion in the Financial Action Task Force (FATF) grey list. The Indian government alleges that foreign aid given to Pakistan is being diverted to finance terror activities. In the past, India has taken strong measures like suspending trade with Pakistan, banning aerospace ties, halting visa services, and reconsidering the Indus Waters Treaty.
Key IMF Board Meeting on May 9: India Registers Protest
India has nominated Parameswaran Iyer as its interim director to the International Monetary Fund (IMF) board, who will represent India at the May 9 meeting. The timing is significant as the IMF is set to review a \$1.3 billion loan under the Climate Resilience Loan Program for Pakistan. Additionally, the first review of Pakistan’s ongoing \$7 billion relief package is also scheduled during this session. India has objected to the disbursal of these funds, claiming the money could fuel terrorism.
IMF Unlikely to Act on India’s Objection
Despite India’s concerns, the IMF has declined to postpone or reconsider the financial package for Pakistan. The board will proceed with the scheduled review on May 9. India had earlier formally requested the IMF to reassess the $1.3 billion loan to Pakistan, citing potential misuse of funds for extremist activities. However, the IMF has chosen to maintain its current agenda.
India Plans Coordinated Push Through Multilateral Institutions
India has now publicly stated that it will approach global multilateral institutions like the IMF, World Bank, and Asian Development Bank to review and reconsider any funding or loans being given to Pakistan. This is part of India’s strategy to mount diplomatic pressure on Pakistan following the recent terror attack in Jammu and Kashmir, in which Indian security forces were targeted.
7 Key Takeaways:
1. India asked ADB to reduce financial support to Pakistan.
2. Sitharaman met ADB and Italian finance officials on the issue.
3. India aims to get Pakistan back on FATF grey list.
4. India nominated Parameswaran Iyer as interim IMF board director.
5. IMF to review $1.3 billion climate loan to Pakistan on May 9.
6. India’s objection to the IMF loan was not accepted.
7. India to pursue coordinated pressure via global institutions like IMF, ADB, and World Bank.
