ADB Grants $800 Million Aid to Pakistan Amid India's Misuse Concerns

Last Updated Jun - 04 - 2025, 05:01 PM | Source : Fela News

Despite India’s objections citing misuse and terror links, the Asian Development Bank has approved an $800 million package for Pakistan to support economic refo

The Asian Development Bank (ADB) has cleared an $800 million bailout package for Pakistan, including a $300 million policy-based loan and a $500 million program-based guarantee. This financial aid is intended to support Pakistan’s economic reforms, public finance management, and foreign investment through the Special Investment Facilitation Council, a body that reportedly has strong military involvement. The approval comes just a month after Pakistan received $1 billion from the International Monetary Fund (IMF), further boosting its struggling economy.

The move has sparked sharp criticism from India, which had strongly objected to any aid for Pakistan during consultations with global lending institutions. Citing the recent Pahalgam terror attack that left 26 civilians dead, India warned that such financial assistance could be diverted toward military use rather than developmental needs. India raised serious concerns over Pakistan's falling tax-to-GDP ratio—dropping from 13% in 2018 to just 9.2% in 2023—and its increasing defence expenditure, which New Delhi believes threatens regional peace and misuses international funding.

In addition to economic concerns, India emphasized Pakistan’s weak implementation of anti-terror financing mandates set by the Financial Action Task Force (FATF), especially in freezing the assets of UN-designated terrorist groups. Indian officials also expressed concern over the military's deep involvement in Pakistan’s economic governance. With the ADB moving ahead regardless, India is now expected to push for Pakistan’s return to the FATF grey list to intensify global scrutiny over its financial conduct and security policies.