Pakistan bags Rs 8,500 cr ADB package despite India’s strong objections

In what is being viewed as a diplomatic setback for India, the Asian Development Bank (ADB) has approved an $800 million (approximately Rs 8,500 crore) bailout package for Pakistan, brushing aside New Delhi’s objections over Islamabad’s track record on terror-financing and economic mismanagement.

The package comprises a $300 million policy-based loan and a $500 million programme-based guarantee aimed at improving Pakistan’s public financial management.

Headquartered in Manila and led by Japanese national Masatsugu Asakawa, the ADB has 69 members, including 49 from the Asia-Pacific such as India, China, Japan, South Korea, and Australia — and 20 non-regional members from Europe and North America. Japan is among the bank's largest shareholders.

The development comes just a month after Pakistan secured a $1 billion package from the International Monetary Fund (IMF), once again overriding India's protests.

India had approached several multilateral lending institutions, including the ADB, in the wake of the 22 April Pahalgam terror attack, urging them to reconsider financial assistance to Pakistan, which India claimed was sheltering the outfit behind the terror attack.

New Delhi highlighted concerns that international aid could be misused for military purposes, citing the sharp decline in Pakistan’s tax-to-GDP ratio — from 13 per cent in 2018 to 9.2 per cent in 2023 — alongside rising defence spending.

India also flagged Islamabad’s repeated failure to carry out structural reforms despite receiving multiple loan packages from the IMF and ADB. It pointed to Pakistan’s fragile governance, economic instability, and the growing dominance of its military in economic matters — notably through the Special Investment Facilitation Council, established in June 2023 to attract foreign investment.