Zero tolerance for terror: Jaishankar speaks to UK counterpart Lammy ahead of IMF meeting on Pak loans

Indian Foreign Minister S Jaishankar on Friday (May 9) talked over the phone to his UK counterpart David Lammy ahead of a crucial board meeting of the International Monetary Fund (IMF) in Washington.

The Indian minister wrote on X his discussion with the foreign secretary centred around “countering terrorism”, in line with New Delhi’s “zero-tolerance” policy.

Had a phone call with UK Foreign Secretary @DavidLammy this afternoon.

Our discussions centered around countering terrorism, for which there must be zero-tolerance.

🇮🇳 🇬🇧

— Dr. S. Jaishankar (@DrSJaishankar) May 9, 2025

India has made it clear it will oppose the additional funding to Pakistan at the board meeting, effectively targeting the country’s cash-strapped and debt-ridden economy.

The two South Asian neighbours are engaged in a limited military conflict after India on May 7 responded to the April 22 Kashmir terror attack by launching missile strikes in Pakistan against at least nine terror camps under Operation Sindoor.

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Can Pakistan’s economy afford a prolonged conflict with India?

Pakistan’s economy is facing significant challenges due to high foreign debt and critically low foreign exchange reserves, leading to a persistent balance of payments crisis and high inflation in recent years.

Foreign debt has shot past $130 billion as of 2024. Over 20 per cent of that is owed to China. On the other side of the ledger, Pakistan’s foreign exchange reserves are barely above $15 billion—a cushion so thin, it could only pay for about three months’ worth of imports.

The real trouble? More than $22 billion in external debt comes due in FY25.

Pakistan earlier managed to secure a $7 billion IMF loan in September 2024. This helped its economy start recovering from near collapse, natural disasters, external pressures, and inflation, according to the IMF’s April South Asia Development Update.

The IMF’s 37-month Extended Fund Facility programme for Pakistan includes six reviews during the bailout period. The next $1 billion payment depends on passing a performance review. On Friday, the IMF board will review Pakistan’s financing.