Everything You Need to Know: India Opposes $20 Billion Loan to Pakistan

India is strongly opposing the $20 billion loan package that Pakistan is expected to receive in June under the Pakistan Country Partnership Framework 2025–35. India plans to raise this issue during upcoming World Bank meetings.

This package is intended to improve social indicators, tackle child malnutrition, address learning poverty, enhance climate resilience, and promote private investment in Pakistan.

FATF Grey List Issue Resurfaces

India is also preparing to push for Pakistan to be placed back on the Financial Action Task Force (FATF) grey list due to continued failure in adhering to anti-money laundering and anti-terror financing regulations. Sources informed PTI that India will present a strong case in the upcoming FATF meetings (held in February, June, and October).

Pakistan was removed from the grey list in 2022, after first being added in 2018 when it submitted an action plan to counter terror funding and money laundering.

India Opposed IMF Bailout Too

India had previously opposed the $2.4 billion bailout package that the International Monetary Fund (IMF) granted to Pakistan on May 9. Following this, the IMF placed 11 new conditions on Pakistan for future installments. These include parliamentary approval for the federal budget, higher surcharges on electricity bills, and lifting bans on used car imports.

India's Global Diplomatic Push

The Indian government reached out to IMF Managing Director Kristalina Georgieva to express concerns, stating that the bailout resembles war-time assistance and could fuel regional instability. India emphasized that Pakistan has misused past IMF funds for arms procurement and fostering terrorism, instead of economic recovery.

India has also raised this issue with the foreign ministers of Germany, France, and Italy, and Indian embassies are engaging with IMF counterparts worldwide to garner support.