June 5, 2025
NEW DELHI – India has strongly criticised the Asian Development Bank’s (ADB) approval of an $800 million financing package for Pakistan, voicing serious concerns about potential misuse of development funds for military expenditure and raising questions about Pakistan’s commitment to economic reforms.
India has reportedly conveyed deep reservations to the ADB regarding Pakistan’s deteriorating fiscal performance, declining tax revenues, and the suspected diversion of international development funds toward defence spending rather than developmental priorities.
On June 3, the ADB approved the package under its Improved Resource Mobilization and Utilization Reform Program – Subprogram 2, which includes a $300 million policy-based loan and the bank’s first-ever policy-based guarantee of up to $500 million.
It is notable that Pakistan, a founding member of the ADB, has received over $52 billion in loans, grants, and other financial assistance from the bank since 1966.
While registering its concerns, India questioned the efficacy of earlier ADB and IMF programs, pointing out that Pakistan has approached the International Monetary Fund for its 24th bailout despite decades of institutional support.
This track record, India argued, casts serious doubt on the design and implementation of such programs by Pakistani authorities.
A few weeks ago, amid rising tensions between India and Pakistan, the IMF approved a $1 billion disbursement under the Extended Fund Facility (EFF), raising total payouts under the programme to $2.1 billion.
Additionally, the IMF also cleared $1.4 billion under the Resilience and Sustainability Facility (RSF), ostensibly aimed at helping Pakistan address climate-related vulnerabilities.
