India threatens to interrupt Pakistan’s IMF Loan program

India has formally requested the International Monetary Fund (IMF) to review the loans disbursed to Pakistan, following escalating tensions between the two nuclear-armed neighbors.

The request comes after a deadly attack in Indian Illegally Occupied Jammu and Kashmir, where 26 people, including Hindu tourists, were killed. This tragic event has heightened fears that the ongoing crisis could lead to military conflict.

The Indian government has identified three attackers in the assault, two of whom it claims are Pakistani nationals, labeling them as “terrorists.” Pakistan, however, has denied any involvement and called for a neutral investigation into the incident.

In response to the attack, India has taken a series of measures, including suspending a critical river water-sharing treaty with Pakistan. Additionally, both countries have closed their airspace to each other’s airlines. These actions have significantly increased the geopolitical tensions between the two nations.

IMF and Pakistan’s Economic Stability

Despite the rising tensions, Pakistan’s economy remains on track, thanks in part to the IMF’s financial assistance. Pakistan secured a $7 billion bailout from the IMF last year, which played a key role in stabilizing the country’s $350 billion economy and averting a potential default. In March 2025, the IMF granted Pakistan an additional $1.3 billion climate resilience loan.

Pakistan’s Position on the IMF Review

In response to India’s request, a government source confirmed that the IMF had not yet provided any comments. Pakistan’s finance advisor, Khurram Schehzad, reassured the public, stating that the IMF program was “well on track,” and emphasized the productive meetings held during the IMF’s spring meetings. He highlighted the growing interest from international investors as the country’s economy continues to stabilize.

Global Reactions to the Rising Tensions

The growing tensions between India and Pakistan have drawn attention from the international community. U.S. Vice President JD Vance expressed hope that Pakistan would cooperate with India in identifying and apprehending the attackers responsible for the assault.

As tensions escalate, calls for de-escalation and cooling tempers have been voiced globally. The conflict over Kashmir, claimed in full by both India and Pakistan, continues to be a sensitive and volatile issue, with both countries controlling parts of the region.

Conclusion

The geopolitical situation between India and Pakistan remains delicate, with both sides standing firm in their positions. The IMF review request is just one of many measures that have surfaced in the wake of this attack, which has further strained relations. The coming weeks will be crucial in determining whether diplomatic efforts can prevent the crisis from escalating further.