India to Present Its Views at IMF Board Meeting on Pakistan’s Bailout Package
India is set to present its official position at the International Monetary Fund (IMF) Board meeting scheduled for today, regarding the proposed financial bailout to Pakistan. Foreign Secretary Vikram Misri confirmed this development during a press conference in New Delhi, stating, “We will put forward our perspective and our views with the IMF members. It is up to the Board as to what decision they take.”
This development comes at a time when Pakistan is seeking a fresh tranche of USD 1 billion under the ongoing IMF bailout programme. India is expected to express opposition to the package, citing Pakistan’s persistent support for terrorism, particularly in light of recent incidents.
Backdrop: April 22 Terrorist Attack in Jammu & Kashmir
Tensions escalated between India and Pakistan following the brutal terrorist attack on April 22 in Pahalgam, Jammu & Kashmir. The assault resulted in the deaths of 26 people—mostly tourists—and left many others injured. This incident prompted India to take several significant retaliatory diplomatic and strategic measures.
India Suspends Indus Waters Treaty
One of the most impactful moves came in the form of suspending the Indus Waters Treaty of 1960. Foreign Secretary Misri confirmed that the treaty is now in abeyance, stating, “Indus Waters Treaty is in abeyance, and I have nothing further to add to the decision that was announced by the Cabinet Committee on Security.”
The treaty, which was brokered by the World Bank after nearly a decade of negotiations, allocates the Western rivers (Indus, Jhelum, Chenab) to Pakistan and the Eastern rivers (Ravi, Beas, Sutlej) to India. Though India receives only 20 per cent of the Indus river system’s waters, the treaty has long been seen as a cornerstone of water-sharing diplomacy between the two nations.
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India to Approach FATF for Grey List Action
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Alongside its opposition at the IMF, India is also reportedly preparing to approach the Financial Action Task Force (FATF) to push for the inclusion of Pakistan back into the “grey list.” This would severely impact Pakistan’s ability to attract international loans and grants, especially from multilateral financial institutions.
World Bank Clarifies Role in Indus Treaty
Speculation has also surrounded the World Bank’s involvement following the suspension of the treaty. World Bank President Ajay Banga clarified that the international financial institution has no authority beyond its facilitative role in the original agreement. “There’s a lot of speculation in the media about how the World Bank will step in and fix the problem but it’s all bunk,” Banga stated.
EU-India Free Trade Agreement Negotiations Advance
Meanwhile, on another front, the Ambassador of the Delegation of the European Union to India, Herve Delphin, confirmed that EU negotiating teams will be in New Delhi next week to continue talks on the proposed India-EU Free Trade Agreement (FTA). Speaking during Europe Day celebrations, Delphin emphasized the importance of this FTA, calling it “a matter of necessity as much as urgency.”
The negotiations, which were relaunched on 17 June 2022, aim to finalise an FTA, an Investment Protection Agreement, and an Agreement on Geographical Indications (GIs) by the end of 2025. This builds upon the strategic momentum provided by the high-level visit of the EU College of Commissioners to New Delhi in February 2025.
India-EU Economic Ties at a Glance
The European Union is currently India’s largest trading partner, with bilateral trade in goods reaching €124 billion in 2023, accounting for 12.2% of India's total trade. In contrast, India is the EU’s 9th largest trading partner. Trade in services between the two reached €59.7 billion in 2023, nearly doubling from €30.4 billion in 2020.
India has underscored the importance of resolving non-tariff barriers (NTBs) and aligning regulatory frameworks to support mutual growth and economic openness. The next round of negotiations is scheduled for 12–16 May 2025 in New Delhi, which both parties hope will mark significant progress.
Conclusion
While India strongly positions itself on the global stage against terrorism-sponsoring Pakistan—both through strategic diplomacy at the IMF and FATF, and through treaty-based actions like the suspension of the Indus Waters Treaty—it also continues to balance this posture with proactive engagement in global economic partnerships such as the EU FTA.
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