Pakistan Struggles with IMF’s 33 Rigorous Terms, India’s Diplomacy Triumphs

Pakistan faces a daunting challenge to meet 33 stringent conditions tied to its $7 billion IMF bailout, approved on May 9, 2025. The terms, seen as a diplomatic win for India, impose fiscal and structural reforms that strain Pakistan’s fragile economy.

IMF’s Rigorous Conditions
The IMF’s Extended Fund Facility (EFF) and Resilience and Sustainability Facility (RSF) demand 33 benchmarks, including 11 new ones. These require a ₹17.6 trillion budget approval, energy tariff hikes, new taxes, and trade liberalization. Pakistan must also privatize state-owned enterprises and curb military spending, measures that risk public backlash. The shallow conditions, such as quarterly fiscal targets and anti-corruption reforms, are deemed nearly unfeasible given Pakistan’s history of non-compliance with IMF programs. 

India’s Diplomatic Maneuver
India’s abstention from the IMF board vote on May 9, coupled with its vocal objections, shaped the bailout’s strict framework. Citing Pakistan’s “poor track record” and potential diversion of funds to “state-sponsored terrorism,” India leveraged its global influence post-Operation Sindoor, a military action targeting terror bases. This stance, backed by India’s economic clout, ensured harsher terms, cornering Pakistan economically.

Economic and Political Strain
Pakistan’s economy, reeling from inflation and debt, faces a ₹165-220 crore shortfall if reforms falter. The conditions, like energy price hikes, could spark protests, while privatization threatens job losses. Prime Minister Shehbaz Sharif’s government, already weakened, struggles to balance compliance with domestic stability. India’s diplomatic pressure, amplified by recent border tensions, has left Pakistan with little wiggle room, risking further isolation.

A Diplomatic Triumph for India
India’s calculated strategy has turned the IMF bailout into a pressure point, exposing Pakistan’s vulnerabilities. By highlighting risks of fund misuse, India secured global scrutiny on Pakistan’s actions. As Pakistan navigates these grueling terms, India’s diplomatic success underscores its growing influence, reshaping the regional power dynamic while Pakistan teeters on the edge of economic collapse.