India has formally requested the Asian Development Bank (ADB) to suspend financial aid to Pakistan, citing concerns over cross-border terrorism following the Pahalgam terror attack that claimed 26 lives on April 22.
Union Finance Minister Nirmala Sitharaman raised the demand during a meeting with ADB President Masato Kanda at the 58th Annual Meeting of the ADB Board of Governors in Milan. Sources confirmed that the funding freeze was a key agenda item, with Sitharaman also discussing the matter with Italian Finance Minister Giancarlo Giorgetti.
India’s Broader Economic Measures Against Pakistan
India has escalated its economic and diplomatic response, including:
- Suspension of the Indus Waters Treaty, which could impact Pakistan’s water supply.
- Downgrading diplomatic ties and banning Pakistani carriers from Indian airspace.
- Lobbying for Pakistan’s re-listing on the FATF grey list, which could restrict its access to international financial aid.
Impact on Pakistan’s Economy
Pakistan, which relies heavily on international financial institutions, faces growing economic uncertainty. The benchmark KSE-100 index dropped by over 7,100 points, reflecting investor anxiety over rising tensions. Moody’s has warned that prolonged instability could impair Pakistan’s access to external financing and pressure its foreign-exchange reserves.
India is also expected to raise objections to Pakistan’s $7 billion IMF bailout package, further tightening financial restrictions on Islamabad.
With diplomatic and economic measures intensifying, the situation remains fluid, and global stakeholders are closely monitoring developments.
Stay tuned for further updates on this developing story.
