Under the ongoing $7 billion loan program, the International Monetary Fund (IMF) has released $1 billion in cash to Pakistan. Meanwhile, Pakistan’s longtime rival India has strongly urged the IMF to thoroughly review the decision to provide loans to the country.

The funds were released on Friday following the approval of the first phase evaluation of the program. Additionally, the IMF has approved a $1.4 billion loan for Pakistan under its Resilience and Sustainability Trust, aimed at climate resilience.

In a statement, the IMF said that despite global challenges, Pakistan’s policy actions under the current loan program have led to significant progress in restoring the country's economic stability and investor confidence.

In mid-2023, the IMF approved a $7 billion loan program for Pakistan aimed at reviving the country’s struggling economy. So far, $2 billion has been disbursed under this program. However, no funds have yet been released from the newly approved loan under the IMF’s Resilience and Sustainability Trust, which focuses on climate resilience.

India has called on the IMF to conduct a more extensive review before providing further loans to Pakistan. During an IMF board meeting on Friday, India argued that the funds Pakistan is receiving could potentially be used to support “state-sponsored terrorist activities along the border.”

In response to India's claims, Pakistan's Prime Minister Shehbaz Sharif stated, "India’s attempt to derail the IMF program has failed."

Tensions between the nuclear-armed neighbors have reached one of their highest points in decades. The current escalation was triggered by a gunmen attack in Pahalgam, in Indian-administered Kashmir, followed by Indian missile strikes in Pakistan and Pakistan-administered Kashmir. The two sides have since engaged in a series of retaliatory attacks.

On April 22, 26 people were killed in the Pahalgam attack, which India blamed on Pakistan—a claim Pakistan has strongly denied. Both nations have taken a series of countermeasures in the wake of the incident, intensifying the ongoing conflict.