India “vehemently opposed” ADB’s latest funding to Pakistan

On June 3, 2025, the ADB announced that it had approved funding of $800 million to Pakistan under its Resource Mobilisation Reform Programme. File.
| Photo Credit: Reuters

In continuation of its efforts in various multinational fora to curb funding to Pakistan, the Indian government “vehemently opposed” the Asian Development Bank’s latest decision to provide additional funding to Pakistan, saying that that country’s increased military spending cannot fully be explained through domestic resource mobilisation, according to government sources.

In addition, India has told the ADB that it expects the multilateral bank’s management to “adequately ring-fence the ADB financing, to prevent any such misuse”.

On Tuesday (June 3, 2025), the ADB announced that it had approved funding of $800 million to Pakistan under its Resource Mobilisation Reform Programme.

“India cautioned the ADB regarding the possibility of misuse of its resources,” according to government sources. “The linkage between Pakistan’s increase in expenditure on its military, as opposed to on development, cannot be fully explained solely in terms of its domestic resource mobilisation.”

The source further said that India pointed out to the ADB that Pakistan’s tax collection as a percentage of its GDP fell from 13% in 2017-18 to 9.2% in 2022-23 and continues to remain way lower than the Asia and Pacific average of about 19.0%. 

However, India highlighted that there has been “a significant increase” in Pakistan’s defense spending during the same period. 

The Hindu has previously reported on how Finance Minister Nirmala Sitharaman had lobbied strongly with the International Monetary Fund and its members, too, to stop additional funding to Pakistan, and how India would be sending a dossier to the Financial Action Task Force (FATF) to re-include Pakistan on the ‘grey list’ of countries that warranted greater supervision.

India expressed strong reservations about Pakistan’s existing governance system to the ADB, the source added. 

“The progress on implementation of the most critical FATF action items relating to terrorist financing investigations and prosecution of leaders of UN-designated terrorist groups and freezing and confiscation of criminal assets is highly unsatisfactory,” the source said.