The International Monetary Fund (IMF) has reportedly warned Pakistan ahead of the release of the next tranche of its bailout programme in the loan approved amid recent India-Pakistan tensions, saying that the tension could heighten risks to the scheme’s fiscal, external, and reform goals.

Defense Minister Rajnath Singh had recently urged the IMF to reconsider it financial assistance programme to Pakistan, noting that any financial assistance to the neighbouring country is no less than terror funding.

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It is reported that the condition mentions that the rising tensions between India and Pakistan, if sustained or deteriorate further, could increase the risks to the fiscal, external and reform goals of the scheme. The risks could also come from any perceived misuse of fund disbursements.

After reviewing the programme, the IMF has reportedly imposed at least 11 new conditions upon Pakistan. The conditions include parliamentary approval of a new Rs 17.6 trillion budget, an increase in the debt servicing surcharge on electricity bills and lifting restrictions on the import of more than three-year-old used cars, NDTV reported citing IMF officials.

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After Rajnath Sing’s remark that the IMF should reconsider aid to Pakistan, the Congress on Saturday accused the Narendra Modi government of ‘simply buckling under the US pressure’ at the MF Executive Board meeting when the loans were deliberated upon.

Congress general secretary for communications Jairam Ramesh pointed out that the defense minister is now criticizing the IMF for approving loans to Pakistan on May 9, 2025.

“But on April 29th itself – before the Modi government woke up – the Congress had said that the IMF Executive Board was meeting on May 9th to consider this issue and that India should oppose it forcefully,” he noted, adding that India could have voted no in the meeting as Russia had voted ‘No’ on a loan proposal to Ukraine in September 2016, while dismissing claims that it was the only option available to India.

Against IMF’s projection, Pakistan has indicated allocating over Rs 2.5 trillion or an 18% higher budget, after confrontation with India early this month, raising concerns in the country.